When using the direct method to determine operating cash flows, how is the retirement of bonds payable at their maturity date shown on the Statement of Cash Flows?
A)operating activity
B)investing activity
C)financing activity
D)noncash investing and financing activity
E)not reported on the statement of cash flows

Question

Quizplus · Accepted Answer

The retirement of bonds payable at their maturity date is considered a financing activity as it involves the repayment of principal to the bondholders. It does not affect the company's operations or investing activities.

When Using the Direct Method to Determine Operating Cash Flows