In Calculating Cash flOws from Operating Activities Using the Indirect

question 88

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 earnings.
• B) deducted from net earnings.
• C) ignored because it does not affect cash.
• D) not reported on a cash flow statement.

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Definitions:

Customer Satisfaction

The measure of how products or services supplied by a company meet or surpass customer expectation.

Scale The Business

The process of expanding a company's operations to handle a growing amount of work or sales in an efficient manner.

Marketability

The ability of a product or service to be sold or marketed effectively to consumers.

Convertible Debt

A type of financing option that allows the holder to convert the outstanding debt into equity, typically shares of the issuing company, under specified conditions.