If a company uses the direct method of calculating net cash flows from operating activities,it must adjust net income for gains or losses when selling property,plant,and equipment.

Question

Quizplus · Accepted Answer

The direct method of calculating net cash flows from operating activities involves listing all the major operating cash receipts and payments during the period, thus it does not require adjusting net income for gains or losses when selling property, plant, and equipment, as these items are considered investing activities, not operating activities.

If a Company Uses the Direct Method of Calculating Net