To Go Company Is Preparing Its Statement of Cash Flows

question 8

Multiple Choice

To Go Company is preparing its statement of cash flows using the indirect method.During the year,they purchased equipment for $15,000 cash.Which of the following statements is true?

• A)$15,000 would be shown as a negative cash flow in the operating activities section.
• B)$15,000 would be shown as a negative cash flow in the investing activities section.
• C)$15,000 would be shown as a positive cash flow in the investing activities section.
• D)$15,000 would be shown as a positive cash flow in the financing activities section.

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Definitions:

Refusing To Pay

Refusing to pay describes a situation where a party deliberately does not settle a financial obligation, debt, or bill owed to another.

Postdated

Referring to a check or other document dated at some point in the future, not effective or valid until that date.

Properly Payable

A term referring to checks or other negotiable instruments that meet all requirements for payment by the financial institution on which they are drawn.

Re credit

A review or reevaluation of an individual's or entity's credit situation, often with the aim of improving their credit score or terms of credit.