A company borrows $10,000 and signs a 90-day nontrade note payable. In preparing a statement of cash flows (indirect method), this event would be reflected as a (n) addition adjustment to net income in the cash flows from operating activities section. cash outflow from investing activities. cash inflow from investing activities. cash inflow from financing activities.

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Business

Aliya Ritter

5 May, 15:20

A company borrows $10,000 and signs a 90-day nontrade note payable. In preparing a statement of cash flows (indirect method), this event would be reflected as a (n) addition adjustment to net income in the cash flows from operating activities section. cash outflow from investing activities. cash inflow from investing activities. cash inflow from financing activities.

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Abagail Dixon · Answer 1

It will be regarded as inflow from financing activities

Explanation:

Since we are receiving money it is an inflow of cash. The bank can be regarded as a finance house. Since we are borrowing money and not buying assets this is regarded as a finance activity and this money will need to repaid in the future (finance from outside parties).