The correct answer is A. non-cash investing and financing activity.
A non-cash investing and financing activity is an activity that affects the long-term assets, liabilities, and equity of a company, but does not involve the receipt or payment of cash. The purchase of machinery by issuing long-term notes payable is an example of a non-cash investing and financing activity.
Option B is incorrect because the purchase of machinery is an investing activity, not an operating activity. Option C is incorrect because the purchase of machinery is an investing activity, not a financing activity. Option D is incorrect because the purchase of machinery is an investing activity, not a cash outflow.
Here is a table that summarizes the different types of activities that are reported on the statement of cash flows:
| Type of activity | Examples |
| — | — |
| Operating activities | Selling goods and services, collecting cash from customers, and paying expenses |
| Investing activities | Buying and selling long-term assets, such as property, plant, and equipment, and making and collecting loans |
| Financing activities | Raising capital by issuing stock or debt, and repaying loans |
I hope this helps! Let me know if you have any other questions.