Lincoln Company engaged in this transaction: As required by the landlord,prepaid one year's rent on its leased warehouse.
Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.
A)Financing activities section.
B)Does not represent a cash flow.
C)Investing activities section.
D)Operating activities section.

Question

Quizplus · Accepted Answer

This transaction relates to operating activities section because it represents a cash outflow for Lincoln Company. Prepaying rent for the warehouse is considered an operating expense, and therefore the transaction is included in the operating activities section of the statement of cash flows.

Lincoln Company Engaged in This Transaction: as Required by the Landlord,prepaid