Paying cash to settle a salaries payable obligation will aff

Paying cash to settle a salaries payable obligation will affect which section of the statement of cash flows?

a. Financing activities

b. Investing activities

c. Noncash activities

d. Operating activities

Solution

Solution - (d) - Operating activities

Paying cash to settle salary payable account is operating activity.

It is neither financing or investing.

Salary payment is part of operating activity. Such payment of salary payable account will be shown as \'working capital changes\' in cash flow statement.