Two methods can be used to construct a statement of cash flows: the direct method and the indirect method. Under the indirect method of constructing a statement of cash flows, data from two accounts in the income statement-or, alternatively, the statement of retained earnings-are used. These two accounts are the firm's and the dividends distributed during the accounting period. Also, in applying this technique, two balance sheet accounts are never used. These two accounts are the cash (and cash equivalents) account and the account. A firm engages in a variety of activities that generate or require cash payment. The following boxes list examples of these activities. Identify whether each transaction produces an operating, an investing, or a financing cash flow. Last month, International Imports Inc. purchased $23,452 worth of office supplies on credit. This transaction is classified as Yorkshire Pudding Inc. borrowed $115,000 in notes that are payable in the next 90 days. This transaction is classified as A firm engages in a variety of activities that generate or require cash payment. The following table lists two of these activities. Classify each transaction according to whether it is a source of cash to the firm (cash inflow) or a use of cash (cash outflow)