When Using the Indirect Method, How Is the Receipt of Cash

question 20

Multiple Choice

When using the indirect method, how is the receipt of cash from the sale of long-term investments treated on the statement of cash flows?

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

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Definitions:

Operating Temperature

The span of temperatures at which a mechanical or electronic device is engineered to operate at its best.

Gearset

A set of gears arranged to transmit mechanical power from one part of a machine to another.

Torque Converter Stator

A component within a torque converter that redirects fluid returning from the turbine to assist in providing torque multiplication.

Stall Speed

The lowest speed at which an aircraft can fly to maintain level flight, or in automotive, the RPM at which the torque converter transfers power from the engine to the transmission under full load.