The acquisition of a building by issuing a mortgage 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 by issuing a mortgage payable is a non-cash investing and financing activity. Such transactions do not affect cash flows directly and are therefore reported in the notes to the financial statements rather than in the statement of cash flows.

The Acquisition of a Building by Issuing a Mortgage Payable