A Company Uses the Indirect Method to Prepare the Statement

question 26

Multiple Choice

A company uses the indirect method to prepare the statement of cash flows. How will a loss from the sale of a building be presented on the statement?

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

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Definitions:

Multinational Company

A corporation that operates in several countries beyond its original country of incorporation, often having a global presence.

College Student Activism

The involvement of college and university students in campaigns and movements aimed at bringing about social, political, or environmental change.

Corporate Codes

Sets of principles and ethics that a company agrees to follow, often relating to social responsibility, environmental policies, and employee relations.

Adopting

The act or process of choosing or accepting something new, such as ideas, technologies, behaviors, or practices, and integrating them into use or practice.