When a company uses the direct method to present the statement of cash flows, cash received from the sale of a long-term asset increases the amount of net cash provided by investing activities.

Question

Quizplus · Accepted Answer

The direct method of presenting the statement of cash flows requires companies to separately list all of their cash inflows and outflows. In this case, cash received from the sale of a long-term asset would be listed as a cash inflow under investing activities, which would increase the total net cash provided by investing activities.

When a Company Uses the Direct Method to Present the Statement