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Justin Tarplin
on Nov 13, 2024

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In calculating cash flows from operating activities using the indirect method a gain on the sale of equipment is

A) added to net income.
B) deducted from net income.
C) ignored because it does not affect cash.
D) not reported on a statement of cash flows.

Cash Flows

The net amount of cash being transferred into and out of a business, especially considered important for assessing liquidity, flexibility, and overall financial health.

Indirect Method

An approach to preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash from operating activities.

Operating Activities

The section of a business's cash flow statement that accounts for its core business operations' cash inflows and outflows, involving receipts from sales, payments to suppliers, and payroll.

  • Learn about the indirect methodology for assessing cash flows connected to operating activities.
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AN
Andiswa NgcoboNov 15, 2024
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