The purchase of long-term assets by issuing a note payable for the entire amount is reported on the statement of cash flows in the:
A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Schedule of noncash financing and investing activities.
E) Reconciliation of cash balance.

Question

Quizplus · Accepted Answer

The purchase of long-term assets by issuing a note payable is a noncash transaction that does not affect the cash flow directly. Therefore, it is reported in the schedule of noncash financing and investing activities on the statement of cash flows.

The Purchase of Long-Term Assets by Issuing a Note Payable