On the Statement of Cash Flows, a $7,500 Gain on the Sale

question 128

Multiple Choice

On the statement of cash flows, a $7,500 gain on the sale of fixed assets would be

• A) added to net income in converting the net income reported on the income statement to cash flows from operating activities
• B) deducted from net income in converting the net income reported on the income statement to cash flows from operating activities
• C) added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends
• D) deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends

---

Definitions:

Revenue Accounts

Accounts that track money earned from a company's operations and activities, usually from the sale of goods and services.

Credits

Accounting entries that increase liabilities or decrease assets, representing the opposite of debits.

Debit

An accounting entry that increases an asset or expense account, or decreases a liability or equity account, on a company's balance sheet.

Credit

A bookkeeping record that raises either liabilities or equity or lowers an asset or expense.