Using the Indirect Method

question 76

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 the gain from selling a long-term investment appear on the statement of cash flows? (The proceeds from selling the investment are considered separately.)

• A) Operating activity
• B) Investing activity
• C) Financing activity
• D) Financing and Investing activities

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Definitions:

Digital Divide

The gap between individuals, households, businesses, and geographic areas at different socioeconomic levels with regard to their access to information and communication technology.

FCC Subsidies

Financial assistance programs provided by the Federal Communications Commission to promote access to telecommunications services in underserved or high-cost areas.

Entry Barriers

Factors or conditions in the marketplace that make it difficult for new competitors to enter a market or industry.

Competitors

Other businesses or individuals who offer similar goods or services, competing for the same customers or market share.