Question

During the year, we made a payment of long-term notes payable of $45,000 and borrowed $20,000 on a long-term note payable. Which of the following is correct for our statement of cash flows?

A. Net cash used for financing activities is ($25,000).
B. Net cash provided by investing activities is $25,000.
C. Net cash provided by financing activities is $25,000.
D. Net cash used for financing activities is ($45,000).

Answer 1

A. Net cash used for financing activities is ($25,000)

Step-by-step explanation:

Borrowing and repayment of note payable are a financing activity recognized under Cash flow

Borrowed note payable $20,000 (Inflow)

Less : Repayment of Note payable ($45,000) (outflow)

Net Inflow of cash ($25,000)