A company repaid a long-term debt during the year. They will report this as an (increase/decrease) in the activities section on the statement of cash flows.

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Rosie

Mathematics

9 February, 05:35

A company repaid a long-term debt during the year. They will report this as an (increase/decrease) in the activities section on the statement of cash flows.

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Zechariah Zhang · Answer 1

Decrease and financing section

Step-by-step explanation:

The cash flows statement categorizes activities into 3 groups namely; Operating, Investing and Financing.

Operating activities captures the changes to current assets and liabilities such as inventory, trade payables and trade receivables, net income, depreciation etc.

Investing has elements such as sale and purchase of fixed asset. While financing dealings with elements around equity changes and long term debts.

As such the payment of long term debt will be reported in the financing activities section as a decrease because it results in the out flow of cash.