The cash paid to settle a long-term note payable is included in the ________ section of the statement of cash flows.
A) operating
B) investing
C) financing
D) noncash

Question

Quizplus · Accepted Answer

Cash paid to settle a long-term note payable is considered a financing activity because it involves a transaction with a creditor to repay a debt. The financing section of the statement of cash flows reports changes in long-term liabilities, including the repayment of principal amounts of notes and bonds payable. The operating section reports cash flows related to the day-to-day operations of the business, while the investing section reports cash flows related to the acquisition and sale of long-term assets. The noncash section reports noncash transactions such as the conversion of debt to equity or the acquisition of assets through the issuance of common stock.

The Cash Paid to Settle a Long-Term Note Payable Is