Under the Indirect Method of Preparing the Statement of Cash

question 101

Multiple Choice

Under the indirect method of preparing the statement of cash flows,a gain on the sale of equipment is:

• A)subtracted from net income in the operating activities section.
• B)added to net income in the operating activities section.
• C)subtracted from the book value of the equipment in the financing activities section.
• D)ignored since this transaction does not affect cash.

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