In Calculating Cash Flows from Operating Activities Using the Indirect

question 4

Multiple Choice

In calculating cash flows from operating activities using the indirect method a gain on the sale of equipment is

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

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Definitions:

Capillaries

The smallest blood vessels in the body that connect arteries and veins, facilitating the exchange of water, oxygen, carbon dioxide, and many other nutrients and waste substances between blood and the tissues of the body.

Bowman's Capsule

A part of the nephron in the kidney that encloses the glomerulus and where blood filtration begins.

Renal Corpuscle

A component of the nephron in the kidney responsible for the filtration of blood to form urine.

Afferent Arterioles

Small branches of arteries that lead to the nephrons in the kidney, responsible for regulating blood pressure and filtration rate.