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Edit View History Bookmarks Window Help apter 1. Quiz MC Qu. 176 A company borrows... 10 A company borrows $125,000 from the Northem Bank and receives the loan proceeds in cash. This represents a/n Multiple Choice 00 2305 Operating activity Expense activity Investing ativit il 4

Solution

Answer: Investing activity

Explanation:

All kind of cash flows in an business organization can ctegorize under four categories when they preparing their statement of cash flow. these categories are

- Cash flows from oporating activities

- cash flows from non capital financing activities

- cash flows from capitai and related activities

- cash flows from investment activities

Short term borrrowings are mostly comes under the cash flow from financing activities. but in this case it is a non programme loan which can be taken into the account as a investment activity ( cash out flow)