In a statement of cash flows, payments to acquire long-term bonds or other debt instruments with maturities greater than one year of other entities should be classified as cash outflows for
A)operating activities.
B)financing activities.
C)investing activities.
D)lending activities.
E)exchange transactions.

Question

Quizplus · Accepted Answer

Payments to acquire long-term bonds or other debt instruments with maturities greater than one year are considered investments in other entities and should be classified as cash outflows for investing activities. This is because these payments represent the acquisition of a long-term asset that is not part of the business's normal operations or financing activities.

In a Statement of Cash Flows, Payments to Acquire Long-Term