A Company Uses the Indirect Method to Prepare the Statement

question 83

Multiple Choice

A company uses the indirect method to prepare the statement of cash flows.It sold a piece of equipment at a loss of $3,600.The equipment was purchased several years ago for $70,500 and had accumulated depreciation of $56,900.What is reported under the operating activities section on the statement of cash flows?

• A)Cash proceeds of $10,000 are subtracted from net income.
• B)Cash proceeds of $10,000 are added to net income.
• C)The loss of $3,600 is subtracted from net income.
• D)The loss of $3,600 is added to net income.

Recognize the impact of digital communication's opportunities and challenges.

Understand the application and avoidance of jargon in business writing.

Understand the components and classifications of costs in manufacturing and service environments.

Differentiate between various types of costs (variable, fixed, direct, indirect, period, and product costs).

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Definitions:

Behaviorism

A theory in psychology that emphasizes the importance of observable behaviors rather than internal processes such as thoughts and emotions.

Watson

Refers to John B. Watson, an American psychologist who established the psychological school of behaviorism, emphasizing the study of observable behavior.

Skinner

B.F. Skinner was a prominent psychologist and behaviorist known for developing the theory of operant conditioning, which describes how behaviors are influenced by their consequences.

Behaviorists

Psychologists who focus on observable behaviors, rather than internal mental processes, as the subject of their studies.