Avatar Company Uses the Indirect Method to Prepare Its Statement

Multiple Choice

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

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