I saw a question in the mock exam regarding cash flow from finance activity:
Long term liability (2013 ) $22,100 (2012) $14,000
The correct answer is 'taking off $8,100' from loan. If loan has increased shouldn't we add it to finance activity because we are getting money?
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11y ago#1We do add it to cash flows from financing activities, which is what the correct answer is.
The choices were 'taking of loan' or 'repayment of loan' - the correct answer is 'taking of loan' (not taking off loan - that was not an option).
For the numbers, the choices include +8,100 and -8,100.
The correct answer is +8,100 (which means we are adding it rather than subtracting it).
So what you write is correct and is what the exam shows as being correct!
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