On November 1, Year 1, Falloch, Incorporated paid $3,600 cash for a contract allowing the company to use office space for one year. The company's fiscal year ends on December 31. Based on this information, the amount of cash flow from operating activities appearing on the Year 1 statement of cash flows would be
A)$2,100
B)$3,000
C)$3,300
D)$3,600

Question

Quizplus · Accepted Answer

The entire $3,600 payment is a cash outflow for operating activities in Year 1, as it was paid in cash for the use of office space.

On November 1, Year 1, Falloch, Incorporated Paid $3,600 Cash