Use the following codes to indicate how the cash flow effect, if any, of each transaction or event would be reported on a statement of cash flows if the operating activities section is prepared using the indirect method. (Choices may be used more than once.)
-Issued long-term bonds.
A)Operating activity--add to net income
B)Operating activity--deduct from net income
C)Inflow from investing activity
D)Outflow from investing activity
E)Inflow from financing activity
F)Outflow from financing activity
G)Noncash investing and financing activity
H)Not reported on statement of cash flows

Question

Quizplus · Accepted Answer

Issuing long-term bonds is a financing activity and would result in an inflow of cash. Therefore, it would be reported on the statement of cash flows in the financing activities section and would be represented by choice E, an inflow from financing activity.

Use the Following Codes to Indicate How the Cash Flow