The issuance of notes payable for borrowing is classified in the statement of cash flows as a(n):
A)Operating activity.
B)Investing activity.
C)Financing activity.

Question

Quizplus · Accepted Answer

Issuing notes payable for borrowing is considered a financing activity because it involves obtaining funds from creditors. Financing activities involve transactions that affect the long-term liabilities and equity sections of the balance sheet, including borrowing and issuing equity securities.

The Issuance of Notes Payable for Borrowing Is Classified in the Statement