In Calculating Cash Flows Provided (Used) by Operating Activities Using

question 80

Multiple Choice

In calculating cash flows provided (used) by operating activities using the indirect method, a gain on the sale of equipment is

• A)added to profit.
• B)deducted from profit.
• C)ignored because it does not affect cash.
• D)not reported on a statement of cash flows.

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Definitions:

Financing Cost

The total expense incurred to finance a purchase or project, including interest, fees, and other charges associated with borrowing money.

Optimal Amount

The quantity of a good or service that achieves the best outcome under given conditions, such as maximizing profit or utility.

Research And Development

The investigative activities that a business or government entity undertakes with the intention of making a discovery that can either lead to the development of new products or procedures, or to the improvement of existing products or procedures.