Using the Indirect Method of Preparing a Statement of Cash

question 60

Multiple Choice

Using the indirect method of preparing a statement of cash flows, a loss on the sale of a capital asset is:

• A) ignored
• B) subtracted in the operating activities section
• C) added in the operating activities section
• D) added in the investing activities section

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Definitions:

Emissions Trading

A market-based approach to controlling pollution by providing economic incentives for achieving reductions in the emissions of pollutants.

Kyoto Protocol

An international treaty that commits its parties to reduce greenhouse gas emissions, based on the scientific consensus that global warming is occurring and that human-made CO2 emissions are driving it.

Greenhouse Gas

Gases in Earth's atmosphere that trap heat, including carbon dioxide, methane, and nitrous oxide, significantly contributing to global warming and climate change.

Chlorofluorocarbons

Synthetic organic compounds once widely used in aerosols and refrigeration, known to deplete the ozone layer and contribute to global warming.