Question

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. true false

Answer 1

False

Step-by-step explanation:

False. The gain or loss from retirement of notes payable is reported under cash flows from financing activities on the statement of cash flows, regardless of whether the direct or indirect method is used. The indirect method adjusts net income for non-cash expenses and changes in working capital to arrive at cash provided by operating activities. The retirement of notes payable is considered a financing activity because it involves the repayment of a liability.