On January 1,2017,the Long-Term Liability section of Quick Silver Co.'s balance sheet showed a balance of $800,000 in the Bonds Payable account.On December 31,2017,the balance in that same account was $765,000.This change would appear on the statement of cash flows as an
A)outflow of cash of $35,000 in the Financing Activities category.
B)inflow of cash of $35,000 in the Financing Activities category.
C)outflow of cash of $35,000 in the Investing Activities category.
D)inflow of cash of $35,000 in the Investing Activities category.

Question

Quizplus · Accepted Answer

The decrease in the Bonds Payable account from $800,000 to $765,000 indicates that the company has paid off $35,000 of its bonds, which is an outflow of cash in the Financing Activities category.

On January 1,2017,the Long-Term Liability Section of Quick Silver Co