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:

Nonrenewable Resources

Natural resources that cannot be replenished at the same rate as they are consumed, including fossil fuels, minerals, and certain groundwater.

Renewable Resources

Natural resources that can be replenished over short periods of time, such as solar energy, wind energy, and biomass.

Net Energy

The difference between the energy expended to harvest an energy source and the amount of energy gained from that source.