Final answer:
The payment of interest expense (option c) on note does not appear in the financing section of the statement of cash flows; it appears in the operating section, as it's an operational expense.
Step-by-step explanation:
The financing section of the statement of cash flows records transactions related to changes in the equity and debt of a business, which are used to fund the business activities. These transactions include issuing shares, borrowing funds through loans or bonds, and repaying debt. When assessing which of the provided options is not an example of a transaction appearing in the financing section, one needs to consider the nature of the cash flow related to financing activities.
- Selling shares of common stock is a financing activity because it involves raising capital by issuing equity.
- Purchasing treasury stock is also a financing activity because it involves the distribution of capital back to the company when it buys back its own shares.
- Repayment of the principal amount of long-term notes is a financing activity as it represents a cash outflow related to debt repayment.
However, the payment of interest expense on notes does not appear in the financing section; instead, it is reported in the operating section of the statement of cash flows, as this is a recurring expense tied to the company's operational activities. Hence, the correct answer is:
c. payment of interest expense on note is not an example of a transaction that would appear in the financing section of the statement of cash flows.