The acquisition of a building by issuing a mortgage note payable would be considered an investing and financing activity that did not affect cash and would be reported in the notes to the financial statements.

Question

Quizplus · Accepted Answer

The acquisition of a building through a mortgage note payable involves both investing (acquiring an asset) and financing (incurring a liability) activities, but it does not involve cash transactions, hence it is reported in the notes to the financial statements.

The Acquisition of a Building by Issuing a Mortgage Note