An example of a cash flow related to a liability that would not appear in the Financing Activities category of the statement of cash flows is
A)mortgage payable.
B)bonds payable.
C)deferred income taxes.
D)a lease obligation.

Question

Quizplus · Accepted Answer

Deferred income taxes are related to income tax timing differences and are classified under operating activities, not financing activities. Financing activities typically include transactions involving long-term liabilities and equity, such as issuing bonds or repaying a mortgage.

An Example of a Cash Flow Related to a Liability