A company's balance sheet shows the account, Notes Payable. This resulted from a loan made by the company's bank. If the end-of-year balance in the notes payable account exceeds the beginning-of-year balance by $5,000, this is shown on the cash flow statement as an
A) inflow of cash of $5,000 in the operating activities category.
B) inflow of cash of $5,000 in the financing activities category.
C) outflow of cash of $5,000 in the operating activities category.
D) outflow of cash of $5,000 in the financing activities category.

Question

Quizplus · Accepted Answer

An increase in notes payable indicates that the company has borrowed more money, which is a financing activity, resulting in a cash inflow.

A Company's Balance Sheet Shows the Account, Notes Payable