Which of the following should be classified as a financing activity on a statement of cash flows?
A) direct exchange transactions involving common stock.
B) interest paid on a long-term notes payable.
C) a loan made to a long time supplier of component parts.
D) both A and C above
E) none of these

Question

Quizplus · Accepted Answer

Interest paid on a long-term notes payable is an operating activity, and a loan made to a supplier is an investing activity. Direct exchange transactions involving common stock do not involve cash flows.

Which of the Following Should Be Classified as a Financing