On the Cash Flow Statement Using the Indirect Method, a Loss

question 81

Multiple Choice

On the cash flow statement using the indirect method, a loss on the sale of equipment will

• A) be added to profit in the operating section.
• B) be deducted from profit in the operating section.
• C) appear as an inflow of cash in the investing section.
• D) appear as an outflow of cash in the investing section.

---

Definitions:

Accrued Expense

An expense that has been incurred but not yet paid for.

Adjusting Entry

A journal entry made at the end of an accounting period to account for unrecorded transactions or to adjust incorrect entries.

Insurance

A contractual agreement that provides financial protection or reimbursement against losses to an individual or entity, in exchange for premiums paid.

Depreciation

The method of allocating the cost of a tangible or physical asset over its expected useful life to account for the decrease in its value over time.