Using the Indirect Method, If Equipment Is Sold at a Gain

question 89

Multiple Choice

Using the indirect method, if equipment is sold at a gain, the

• A)sale proceeds received are deducted in the operating activities section.
• B)sale proceeds received are added in the operating activities section.
• C)amount of the gain is added in the operating activities section.
• D)amount of the gain is deducted in the operating activities section.

---

Definitions:

Federal Income Tax

A tax levied by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Social Security Tax

A tax levied on both employers and employees to fund the Social Security program, which provides retirement, disability, and survivorship benefits.

Gross Salary

The total amount of an employee's earnings before any deductions are made, such as taxes and social security contributions.

Insurance

A financial product that provides protection against financial loss, offering compensation in the case of specific events such as accident, illness, or damage to property.