Asked by Abigail Bailey on Jun 15, 2024
Verified
The gain or loss from retirement of notes payable is reported under cash flows from operating activities on the statement of cash flows using the indirect method.
Retirement of Notes Payable
The process of paying off or settling a debt obligation represented by promissory notes.
Cash Flows from Operating Activities
The section of a company's cash flow statement that represents the amount of money a company brings in from its regular business activities.
- Understand the effect of transactions and events on the cash balance at period-end.
- Differentiate among operating, investing, and financing activities within the framework of cash flow analysis.
Verified Answer
AK
Ashley KatrinaJun 19, 2024
Final Answer :
True
Explanation :
The gain or loss from retirement of notes payable is considered a non-cash transaction and is therefore included in the adjustments to reconcile net income to cash flows from operating activities using the indirect method.
Learning Objectives
- Understand the effect of transactions and events on the cash balance at period-end.
- Differentiate among operating, investing, and financing activities within the framework of cash flow analysis.
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