Gains and losses on the sale of assets are listed on a direct-method cash flow statement as these items have an effect on cash.

Question

Quizplus · Accepted Answer

Gains and losses on the sale of assets are not listed in the operating activities section of a cash flow statement prepared using the direct method. Instead, the cash received from the sale of assets is reported in the investing activities section, and gains or losses are adjustments in the reconciliation of net income to net cash provided by operating activities in the indirect method.

Gains and Losses on the Sale of Assets Are Listed