Which of the Following Statements Is false regarding How the Cash

question 151

Multiple Choice

Which of the following statements is false regarding how the cash flow effects of the changes in the equipment and accumulated depreciation accounts would be reported on a statement of cash flows if the indirect method is used to prepare the operating activities section?

• A) Cash proceeds from the sale of the equipment would be reported as a cash inflow in the investing activities section.
• B) The cash paid to purchase equipment would be reported as a cash outflow in the investing activities section
• C) Depreciation expense would be added to net income in the operating activities section.
• D) A loss on the sale of the equipment would be subtracted from net income in the operating activities section

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