When Using the Indirect Method, How Is the Purchase of Equipment

question 168

Multiple Choice

When using the indirect method, how is the purchase of equipment for cash shown 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:

Certificate Of Deposit

A savings certificate with a fixed maturity date and specified fixed interest rate, issued by a bank to a depositor.

Bank

A financial institution licensed to receive deposits and make loans, offering various other financial services.

Currency Requirement

The necessity for a form of payment to be accepted as valid currency within a financial transaction.

Negotiability

The ability of a financial instrument to be transferred from one party to another with the title passing legally to the transferee.