When a company sells equipment for cash,which of the following is the correct reporting on the statement of cash flows?
A)Gain or loss in operating section,amount of cash received in operating section
B)Gain or loss in operating section,amount of cash received in investing section
C)Gain or loss in investing section,amount of cash received in investing section.
D)Gain or loss in investing section,amount of cash received in investing section .

Question

Quizplus · Accepted Answer

When a company sells equipment for cash, the gain or loss from the sale is reported in the operating section of the statement of cash flows. However, the cash received from the sale is reported in the investing section since it represents a cash inflow from the sale of a long-term asset, which is an investing activity. Therefore, option B "Gain or loss in operating section, amount of cash received in investing section" is the correct reporting on the statement of cash flows.

When a Company Sells Equipment for Cash,which of the Following