Using the Indirect Method

question 25

Multiple Choice

Using the Indirect Method
For the following question(s) , indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the indirect method.
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When using the indirect method, where is depreciation expense recorded on the statement of cash flows?

• A) Operating activity
• B) Investing activity
• C) Financing activity
• D) Noncash investing and financing activity

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Definitions:

Principled

Operating according to ethical standards and specific, often moral, principles.

Avoidance

Pretends that a conflict doesn’t really exist.

Authoritative Command

A management style where leaders make decisions without consulting subordinates, relying on their authority for compliance.

Unassertive

A behavior pattern in which individuals tend to avoid expressing their opinions or needs, and often accommodate others to avoid conflict.