Avatar Company Uses the Indirect Method to Prepare Its Statement

question 79

Multiple Choice

Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following information:
• Repayments on long-term notes payable: $40,000
• New borrowing on long-term notes payable: $34,000
Which of the following statements is accurate regarding the statement of cash flows?

• A) $34,000 will be shown as a positive cash flow in the investing section.
• B) $40,000 will be shown as a positive cash flow in the financing section.
• C) $34,000 will be shown as a positive cash flow in the financing section.
• D) $40,000 will be shown as a negative cash flow in the investing section.

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Definitions:

Bearish

A term used in investing to describe the belief that a market, asset, or economy is on a downward trajectory.

Elliott Wave Theory

Elliott Wave Theory is a technical analysis methodology that proposes financial market prices unfold in specific patterns, often called waves, which are driven by the psychology of market participants.

Primary Bull Trend

A market phase characterized by rising stock prices, investor optimism, and generally favorable economic conditions over an extended period.

Buy Signal

An indicator or analysis result suggesting that it is potentially a good time to purchase a particular security or investment.