Hy, Why In Cash flow statement, Long term liability is reflecting in 'Cash flow from operating' instead of 'Cash flow from financing' in the 'cash flow statement'.

Hi Zaheer khan!

I understand that you need to see how your business is doing with the use of the Statement of Cash Flows. Let me explain the reason why the long-term liability is in the Operating Activities.

Cash flow from Operating Activities is the section that reflects the daily activities of managing a business. This includes the changes in working capital or the operating assets and liabilities. The Financing Activities section shows the money that is used to fund the company.

How it reflects on your Statement of Cash Flows depends on how you recorded the transaction. If the Long Term Liability you're referring to is a business loan, make sure you enter it in QuickBooks Online the right way so it'll be part of the Financing Activities. You may follow the steps in this article: How to record a company loan from a company officer or owner.

Also, I suggest you review this link: How to prepare and analyze a statement of cash flows. This is an article from one of our accounting professionals that explains more about the Statement of Cash Flows.

Need more references in running a business? Visit our QBO Articles page.

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