Assuming that Sonic Company uses the indirect method for the statement of cash flows, an activity may be classified into the categories as follows:

1. Operating activity add to net income
2. Operating activity subtract from net income
3. Investing activity cash inflow
4. Investing activity cash outflow
5. Financing activity cash inflow
6. Financing activity cash outflow
7. Noncash transaction

Issuance of a short-term nontrade note payable for cash should be classified as

A. Operating activity- add to net income.

B. Investing activity-cash inflow.

C. Financing activity cash inflow.

D. Financing activity cash outflow.