The Sonesta Company Uses the Indirect Method for the Statement

question 67

Multiple Choice

The Sonesta Company uses the indirect method for the statement of cash flows. In 2013, they purchased equipment for $10,000 cash. Which of the following statements is TRUE?

• A) $10,000 would be shown as a negative cash flow in the operating activities section.
• B) $10,000 would be shown as a negative cash flow in the investing activities section.
• C) $10,000 would be shown as a positive cash flow in the investing activities section.
• D) $10,000 would be shown as a positive cash flow in the financing activities section.

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Definitions:

Justification/Recommendation Report

A document that provides reasons for a decision or course of action and suggests specific actions to be taken.

All-In-One Machine

A device that combines several functionalities, such as printing, scanning, copying, and sometimes faxing, into a single unit.

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A written message, typically within an organization, conveying information or instructions in a formal manner.

Informal Reports

Casual or less structured reports typically used for internal communication in an organization.