On the statement of cash flows, the repayment of long-term obligations would be considered:
A)A financing activity
B)An investing activity
C)An operating activity
D)A reduction in a liability

Question

Quizplus · Accepted Answer

Repayment of long-term obligations is considered a financing activity because it involves the use of funds from external sources of financing (i.e. long-term loans or bonds) to pay off existing debt obligations. This activity affects the company's overall financial structure and represents a significant cash outflow from the company.

On the Statement of Cash Flows, the Repayment of Long-Term