When the direct method is used to determine operating cash flows,how is the purchase of equipment for cash shown on the statement of cash flows?

Question

Quizplus · Accepted Answer

The purchase of equipment for cash is a transaction related to investing activities, as it involves the acquisition of a long-term asset that will be used in the business. Therefore, it would be shown as an investing activity on the statement of cash flows when the direct method is used.

When the Direct Method Is Used to Determine Operating Cash