Under U.S.GAAP, the statement of cash flows classifies changes in accounts payable as a(n) _____ activity and classifies changes in short-term bank borrowing as a(n) _____ activity.
A)operating: financing
B)financing; operating
C)investing; operating
D)operating; operating
E)financing; financing

Question

Quizplus · Accepted Answer

Changes in accounts payable are related to the purchase of goods and services and are therefore considered operating activities. Changes in short-term bank borrowing involve the use of debt financing and are considered financing activities.

Under USGAAP, the Statement of Cash Flows Classifies Changes in Accounts