Final answer:
Items reported under financing activities on the cash flow statement include cash dividends paid to shareholders, cash received from issuing notes payable, and cash paid to repay debt. These reflect the company's financing transactions and how it manages its financial structure.
Step-by-step explanation:
The items that would be reported under financing activities on the statement of cash flows include:
- Cash dividends paid to shareholders
- Cash received from issuing notes payable
- Cash paid to repay debt
These activities are directly related to the ways a firm finances its operations and manage its financial structure. For example, paying out cash dividends to shareholders represents a return on their investment and is a direct use of financial capital. Similarly, when a company receives cash from issuing debt, like notes payable or bonds, it is raising new financial capital, which is a core financing activity. Lastly, repaying debts signifies the cash outflows for the settlement of the company's obligation, which is also classified under financing activities.
Interest payments, on the other hand, are generally reported under operating activities because they are part of the day-to-day operations of a company and are expensed on the income statement.