Use the following codes to indicate how the cash flow effect, if any, of each transaction would be reported on a statement of cash flows if the operating activities section is prepared using the direct method. (Choices may be used more than once.)
-Purchased truck for cash.
A)Inflow from operating activity
B)Outflow from operating activity
C)Inflow from investing activity
D)Outflow from investing activity
E)Inflow from financing activity
F)Outflow from financing activity
G)Noncash investing and financing activity
H)Not reported on statement of cash flows

Question

Quizplus · Accepted Answer

Purchasing a truck for cash is considered an outflow from investing activities because it involves acquiring a long-term asset, which falls under the investing activities category in the statement of cash flows.

Use the Following Codes to Indicate How the Cash Flow