Cash paid for the retirement of long-term debt will be shown:
A) in the financing activity section of the cash summary budget.
B) in the investing activity section of the cash summary budget.
C) on the cash disbursements budget.
D) in the operating activity section of the cash summary budget.

Question

Quizplus · Accepted Answer

Cash paid for retirement of long-term debt is a financing activity because it involves reducing the amount of funds borrowed from creditors. Therefore, it will be shown in the financing activity section of the cash summary budget.

Cash Paid for the Retirement of Long-Term Debt Will Be