A company's transactions with its creditors to borrow money and/or to repay the principal amounts of loans are reported as cash flows from:
A)Operating activities
B)Investing activities
C)Financing activities
D)Direct activities
E)Indirect activities

Question

Quizplus · Accepted Answer

The transactions related to borrowing money and repaying loans involve attracting or repaying funds to/from creditors, which is considered as financing activities. This includes obtaining loans, issuing bonds, and making payments to creditors for principal amounts. The cash flow from financing activities section of the statement of cash flows reports these activities.

A Company's Transactions with Its Creditors to Borrow Money And/or