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A company purchased equipment for $150,000 by paying $50,000 and signing a $100,000 note payable. The entire $150,000 is reported as a cash outflow in the financing section of the statement of cash flows.

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Answer: False

Step-by-step explanation:

The financing section deals with only the transactions that have to do with equity and debt. The Investing section deals with capital expenditure such as fixed assets and investments in other company securities.

The $50,000 should therefore be recorded in the Investing section as a Cash outflow.

The $100,000 is not a cash transaction but will be recorded in the Notes to the Statement of Cashflows as a Non-Cash transaction for disclosure purposes.

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