Which of the following is NOT an example of a transaction that would appear in the...

Which of the following is NOT an example of a transaction that would appear in the financing section of the statement of cash flows?

Select one:

a. Repayment of principal amount of long-term note

b. Payment of interest expense on note

c. Selling shares of common stock

d. Purchasing treasury stock

e. None of the above

Solutions

Expert Solution

Answer: Option (b) is correct

Explanation:

Payment of interest on note is added to the Net Profit under cash flows from operating activities. It is not shown under financing activity, as the repayment of loan/note (which is shown under financing activity) includes the amount relating to the payment of interest.

ekkarill92 answered 1 year ago

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