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Basic Question 14 of 20
Although short-term notes payable are classified as a current liability, cash transactions involving short-term notes are classified as financing activities on the statement of cash flows. True or False?
User Contributed Comments 8
| User | Comment |
|---|---|
| Dinosaur | this does not include accounts payable? |
| Micha | As I understand the explanation it includes only "notes". Thus they are not included in working capital. |
| justbassbaby | isn't paying interest CFO? |
| gill15 | In the CFA curriculum book an example on pg 253 states company issued a 30000 90 day note at 8 percent. The end result was CFO decreased by 30000. CFF was not the answer. If they say its a 90 day note and dont say its a short term 90 day note..is that the difference. That cant by right. |
| Shaan23 | Gill. I just read that example. its a 180 day note. Maybe thats not considered a short term note but if it is that's definitely a discrepency with this answer. |
| Shaan23 | Gill. Actually. Redid the question. They do say the 180 day note is a CFF. Read again. |
| xemex131 | Any bond issue is a CFF, short term and long term doesn't matter...Same with repayment of the principal.. |
| kingirm | Agree without xemex. Doesn't matter short or long term. |
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Learning Outcome Statements
describe the steps in the preparation of direct and indirect cash flow statements, including how cash flows can be computed using income statement and balance sheet data
CFA® 2025 Level I Curriculum, Volume 2, Module 4.