Rocket Corporation Entered into the Following Transactions

question 115

Multiple Choice

Rocket Corporation entered into the following transactions:
The accrual of wages and salaries expense.
The cash sale of equipment for a loss.
The cash payment in advance for a one-year insurance policy.
Which of the following statements is correct with respect to determining Rocket's cash flows from operating activities on the statement of cash flows?

• A)The accrual of wages and salaries expense is deducted from net income.
• B)The loss on the equipment sale is deducted from net income.
• C)The cash payment to purchase the insurance policy is deducted from net income.
• D)The accrual of wages and the equipment loss are both deducted from net income.

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