In Calculating Cash Flows from Operating Activities Using the Indirect

question 20

Multiple Choice

In calculating cash flows from operating activities using the indirect method, a loss 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:

Price Charged

The amount of money demanded or set as payment for the sale of a good or service.

Hardware Stores

Retail businesses specializing in selling tools, building materials, and home improvement products.

Tools

Instruments or software used to perform tasks or functions, especially in the context of technical or specialized processes.

Independent Populations

Two or more populations that do not affect each other, such that measurements from one population are not related to measurements from the others.