What Is the Proper Treatment of a Loss on Disposal

question 118

Multiple Choice

What is the proper treatment of a loss on disposal of equipment when using the indirect method to complete the cash flows from operating activities section?

• A) Disregard the loss because it relates to an investing activity.
• B) Disregard the loss because it relates to a financing activity.
• C) Add the loss to net income.
• D) Subtract the loss from net income.

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