Final answer:
Bonds are classified as an activity in the cashflow category of investing. When a company invests in bonds, it is using its cash to purchase financial instruments that will generate a stream of future payments in the form of interest and principal.
Step-by-step explanation:
Bonds are classified as an activity in the cashflow category of investing. Investing activities include the acquisition and disposal of long-term assets, such as bonds, stocks, and property, that are not directly related to the day-to-day operations of a business. When a company invests in bonds, it is using its cash to purchase financial instruments that will generate a stream of future payments in the form of interest and principal.