Acquiring land with a long-term note is:
A)Reported as an investing activity in the statement of cash flows.
B)Reported as a financing activity in the statement of cash flows.
C)Reported as a noncash investing and financing activity.
D)None of these is correct.

Question

Quizplus · Accepted Answer

Acquiring land with a long-term note is a noncash investing and financing activity because it does not involve the exchange of cash but instead the exchange of a note payable, which represents a financing activity. It is also an investing activity because it involves the acquisition of an asset that will be used in the business. Therefore, it is reported as a noncash investing and financing activity in the statement of cash flows.

Acquiring Land with a Long-Term Note Is