When Using the Direct Method, How Is the Sale of Long-Term

question 103

Multiple Choice

When using the direct method, how is the sale of long-term investments for cash reported 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:

Pavlovian Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Reward

A stimulus that increases the likelihood of a behavior being repeated.

Crespi

Refers to psychologist Leonard Crespi, known for his work in experimental psychology, especially in motivational research involving rewards.