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.

---

Definitions:

Board Members

Individuals elected or appointed to oversee the activities of a company or organization, providing governance, strategic direction, and oversight.

Staff

Individuals employed by an organization, particularly those on the payroll who contribute to the execution of tasks and functions.

Mission Creep

The gradual broadening of the original objectives of an organization or mission, often leading to a shift in focus and dilution of efforts.

Program Decentralization

The process of distributing administrative functions, powers, or tasks from a central authority to regional or local branches or units within an organization or system.