Using the Indirect Method (Statement of Cash Flows),a Gain from the Sale

question 20

Multiple Choice

Using the indirect method (statement of cash flows) ,a gain from the sale of equipment would:

• A)be subtracted from net income
• B)be added to net income
• C)have no adjustment made to net income
• D)be added to the investing section of the statement of cash flows

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Definitions:

Statute of Frauds

A legal doctrine that requires certain types of contracts to be in writing and signed by the party to be charged in order to be enforceable.

Notation or Memorandum

Notation or Memorandum refers to a brief written record or note made for the purpose of aiding memory or providing formal documentation of an event, decision, or agreement.

Bilateral Contract

A legal agreement where each party promises to perform an act in exchange for the other party's act.