41. Using the Direct Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the direct method.
When using the direct method, where is the collection of cash from customers shown on the statement of cash flows?
A. Operating activity
B. Investing activity
C. Financing activity
D. Noncash investing and financing activity
42. Using the Direct Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the direct method.
When using the direct method, where are salaries paid to employees reported on the statement of cash flows?
A. Operating activity
B. Investing activity
C. Financing activity
D. Noncash investing and financing activity
43. Using the Direct Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the direct method.
When using the direct method, where is the sale of long-term investments for cash reported on the statement of cash flows?
A. Operating activity
B. Investing activity
C. Financing activity
D. Noncash investing and financing activity
44. Using the Direct Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the direct method.
When using the direct method, where is the purchase of equipment for cash shown on the statement of cash flows?
A. Operating activity
B. Investing activity
C. Financing activity
D. Noncash investing and financing activity
45. Using the Direct Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the direct method.
When using the direct method, where is the purchase of equipment for cash shown on the statement of cash flows?
A. Operating activity
B. Investing activity
C. Financing activity
D. Noncash investing and financing activity
46. Using the Direct Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the direct method.
When using the direct method, where is the issuance of stock for cash shown on the statement of cash flows?
A. Operating activity
B. Investing activity
C. Financing activity
D. Noncash investing and financing activity
47. Using the Direct Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the direct method.
When using the direct method, where is the retirement of bonds payable at their maturity date shown on the statement of cash flows?
A. Operating activity
B. Investing activity
C. Financing activity
D. Noncash investing and financing activity
48. Using the Direct Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the direct method.
When using the direct method, where is the payment of a cash dividend shown on the statement of cash flows?
A. Operating activity
B. Investing activity
C. Financing activity
D. Noncash investing and financing activity
49. Using the Indirect Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the indirect method.
When using the indirect method, where is the issuance of stock to retire a long-term debt shown on the statement of cash flows?
A. Operating activity
B. Investing activity
C. Financing activity
D. Noncash investing or financing activity
50. Using the Indirect Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the indirect method.
When using the indirect method, where is depreciation expense recorded on the statement of cash flows?
A. Operating activity
B. Investing activity
C. Financing activity
D. Noncash investing and financing activity
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