Avatar Company Uses the Direct Method to Prepare Its Cash

Multiple Choice

Avatar Company uses the direct method to prepare its cash flow statement.Please refer to the following information:
• Repayments on long-term bills payable: $40 000
• New borrowing on long-term bills payable: $34 000
Which of the following statements is accurate regarding the cash flow statement?

A) $40 000 will be shown as a positive cash flow in the financing section.
B) $34 000 will be shown as a positive cash flow in the investing section.
C) $40 000 will be shown as a negative cash flow in the investing section.
D) $34 000 will be shown as a positive cash flow in the financing section.