Hubble Corporation, Which Uses the Indirect Method to Prepare Its

question 50

Multiple Choice

Hubble Corporation, which uses the indirect method to prepare its statement of cash flows, sold used equipment for cash. Which statement regarding this sale is TRUE?

• A)The cash from operating activities will be greater if the direct method is used to prepare the statement of cash flows.
• B)The effect on cash from operating activities depends on whether there was a gain or loss on sale.
• C)The cash from operating activities will be less if the direct, rather than indirect, method is used to prepare the statement of cash flows.
• D)The cash from operating activities will not be reported if the indirect method is used to prepare the statement of cash flows.

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