A Company Uses the Indirect Method to Prepare the Statement

question 125

Multiple Choice

A company uses the indirect method to prepare the statement of cash flows. How would a gain from the sale of equipment be presented on the statement?

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

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Definitions:

Prosopagnosia

A brain disorder marked by an inability to identify facial features.

Priming

A technique in psychology used to train people's memory both in positive and negative ways by presenting information that influences the response to subsequent stimuli without awareness of the connection.

Sensory Nerve Endings

Specialized structures responsible for converting external stimuli like touch, temperature, and pain into neural signals that the brain can interpret.

Sensory Receptors

Sensory nerve endings that respond to stimuli.