A Company Uses the Indirect Method to Prepare the Statement

question 20

Multiple Choice

A company uses the indirect method to prepare the statement of cash flows. How will a loss from the sale of a building be presented on the statement?

• A)A loss from the sale of a building will be an addition in the investing activities section.
• B)A loss from the sale of a building will be added to net income in the operating activities section.
• C)A loss from the sale of a building will be deducted from net income in the operating activities section.
• D)A loss from the sale of a building will be a deduction in the financing activities section.

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Definitions:

Cost Leadership

A competitive advantage strategy by minimizing operational costs to offer products or services at the lowest price in the market.

Manufacturing Facilities

Locations where products are produced or assembled.

Capacity Allocation

The process of assigning available resources or space to various operations, tasks, or productions within an organization.

Facility Role

The defined responsibilities and functions of a facility within an organization or network, such as manufacturing, storage, or distribution.