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:

Legislate

The act of creating laws or setting regulations by a governing body.

Initiating Behaviors

Actions taken to start or set something in motion, often related to leadership or the beginning of processes.

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Lacking encouragement or assistance from others, often resulting in a negative impact on morale or success.

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Constructive information or criticism given to someone which is intended to help improve or correct future actions.