Question

On the statement of cash flows, the cash flows from operating activities section would include a. receipts from the issuance of common stock b. payments for cash dividends c. payment for interest on short-term notes payable d. payments for the purchase of investments

Answer 1

Answer:

c. payment for interest on short-term notes payable

Explanation:

Cash flow statement shows positive and negative cash flows that result from activities of a business. It is divided into 3 parts: cash flow from operating activities, cash flow from investing activities, cash flow from financing activities.

Cash flows form operations involves cash flows from regular business activities. A positive change in assets represents an outflow and a negative change in liability represents an inflow.

Items considered under operating activities include inventory, accounts receivable, accrued revenue, accounts payable, and tax liabilities.

Payment for interest on short-term notes payable is a account payable item, so it is included in cash flow from operations