The issuance of a long-term debt for cash would appear on the statement of cash flows as a(n)
A)investing activity.
B)operating activity.
C)financing activity.
D)equity activity.
E)debt activity.

Question

Quizplus · Accepted Answer

Issuing long-term debt for cash represents a financing activity as it involves obtaining funds from external sources (creditors) to finance the company's operations rather than generating funds from operations or investing activities. The statement of cash flows separates cash inflows and outflows into three categories: operating, investing, and financing activities.

The Issuance of a Long-Term Debt for Cash Would Appear