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

Question

Quizplus · Accepted Answer

When using the direct method to present the statement of cash flows, cash received from the sale of treasury stock is reported as a financing activity, not an investing activity. Therefore, it does not increase the net cash provided by investing activities.

When a Company Uses the Direct Method to Present the Statement