If a Company Uses the Indirect Method to Prepare the Statement

question 144

Multiple Choice

If a company uses the indirect method to prepare the statement of cash flows, how will a loss from the sale of equipment be presented on the statement of cash flows?

• A)A loss from the sale of equipment will be added to net income in the operating activities section in the statement of cash flows.
• B)A loss from the sale of equipment will be an addition in the financing activities section in the statement of cash flows.
• C)A loss from the sale of equipment will be deducted from net income in the operating activities section in the statement of cash flows.
• D)A loss from the sale of equipment will be an addition in the investing activities section in the statement of cash flows.

---

Definitions:

Emotional Stability

A personality trait that involves the ability to remain calm, resilient, and secure through stressful situations or under pressure.

Avoidant Attachment Style

Refers to a pattern of distancing oneself from emotional intimacy and depending less on others.

Attachment Style

Patterns of expectations, needs, and behaviors in relationships, developed early in life and influenced by the relationship with primary caregivers.

Personality Traits

Enduring characteristics or behaviors that define an individual's patterns of thought, emotion, and behavior.