A company borrows $10,000 and signs a 90-day nontrade note payable. In preparing a statement of cash flows (indirect method), this event would be reflected as a(n)
A) addition adjustment to net income in the cash flows from operating activities section.
B) cash outflow from investing activities.
C) cash inflow from investing activities.
D) cash inflow from financing activities.

Question

Quizplus · Accepted Answer

Borrowing money involves obtaining funds from external sources, which falls under financing activities in the statement of cash flows. Therefore, this event would be reflected as a cash inflow from financing activities.

A Company Borrows $10,000 and Signs a 90-Day Nontrade Note