Definition of Short-Term Bank Loans
Short-term bank loans are generally loans that must be repaid within one year of the date of the balance sheet. In other words, a short-term bank loan is a current liability.
Reporting Short-Term Bank Loans on the Statement of Cash Flows
The cash inflows received through short-term bank loans and the cash outflows used to repay the principal amount of short-term bank loans are reported in the financing activities section of the statement of cash flows.
The interest paid on short-term bank loans is included in the operating activities section of the statement of cash flows.
