Cash flows from borrowing and paying off a 180-day bank loan are classified as:

Question

Quizplus · Accepted Answer

Cash flows from borrowing and paying off a bank loan fall under financing activities, as they involve changes in the company's long-term liabilities (i.e. debt). Operating activities involve cash inflows and outflows related to day-to-day business operations, investing activities relate to the acquisition and disposal of long-term assets or investments, and purchasing activities is not a recognized category of cash flows.

Cash Flows from Borrowing and Paying Off a 180-Day Bank