A Company Uses the Indirect Method to Prepare the Statement

question 12

Multiple Choice

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

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

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Definitions:

Medicine

The applied science of healing or treating diseases to enhance an individual’s health and well-being.

Industrial Mental Health

The study and practice of maintaining and improving mental health in the workplace.

Inputs into Outputs

The process of transforming resources or inputs (such as labor, materials, and information) into products, services, or results (outputs).

Internal Components

The elements or parts within a system, organization, or device that function together to ensure its operation or effectiveness.