When Preparing the Statement of Cash Flows Using the Indirect

question 94

Multiple Choice

When preparing the statement of cash flows using the indirect method,which statement is INCORRECT?

• A)Gains on the sale of long-term assets are subtracted from net income.
• B)Losses on the sale of long-term assets are subtracted from net income.
• C)Depreciation expense is added to net income.
• D)Increases in current liabilities are added to net income.

---

Definitions:

State Appellate Courts

Intermediate courts within a state's judiciary system that review and rule on appeals from lower court decisions.

Reporters

Individuals or journalists who research, write, and report on news stories for various media outlets.

Chronologically

Arranged in the order of time, used to describe the sequencing of events from the earliest to the most recent.

Citation

A reference to a legal authority or document, such as statutes, case law, or regulations, used to support arguments in legal writing and proceedings.