For each transaction provided in items , select the proper section of the statement of cash flows in which it should be reported using the indirect method from the reporting categories provided in a through h below.If the item is not required to be reported on the statement of cash flows, place an 'X' in the space provided.
-Retired long-term debt before its maturity date
A) Cash flows from operating activities-will be added to net income
B) Cash flows from operating activities-will be subtracted from net income
C) Cash flows from investing activities-increase as a result of cash inflows
D) Cash flows from investing activities-decrease as a result of cash outflows
E) Cash flows from financing activities-increase as a result of cash inflows
F) Cash flows from financing activities-decrease as a result of cash outflows
G) Disclosed as a non-cash transaction in the notes
H) Appears in operating activities only under the direct method

Question

Quizplus · Accepted Answer

Retiring long-term debt before its maturity date involves paying out cash to settle the debt, which is a financing activity that results in a decrease in cash, hence reported in cash flows from financing activities as a cash outflow.

For Each Transaction Provided in Items , Select the Proper