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:

Expansion

The phase of the business cycle where economic activities and production levels increase, leading to growth in GDP and employment.

Indexed Equity Mutual Fund

An equity mutual fund that holds a portfolio of stocks that matches their share (or weight) in a broad stock market index such as the S&P 500. The overhead of these funds is usually quite low because their expenses on stock trading and research are low.

Managed Equity Fund

An investment fund in which a manager or management team makes decisions about how to allocate assets in a portfolio of equities.

Operating Costs

Refers to the day-to-day expenses involved in running a business, such as rent, utilities, and payroll.