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.

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Definitions:

Retrograde Amnesia

A loss of memory-access to events that occurred or information that was learned before an injury or the onset of a disease.

Retroactive Amnesia

A type of amnesia where an individual loses memories for events that occurred before a certain event, often a traumatic one, making it difficult to remember past information.

Retrograde Amnesia

A loss of memory-access to events that occurred, or information that was learned, before an injury or the onset of a disease.

Prefrontal Lobe

A part of the frontal lobes of the brain involved in decision making, social behavior, and personality expression.