When using the direct method, how 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

Question

Quizplus · Accepted Answer

The purchase of equipment for cash is considered an investing activity and is shown in the cash flows from investing activities section of the statement of cash flows when using the direct method.

When Using the Direct Method, How Is the Purchase of Equipment