A loss from sale of equipment would appear on the cash flow statement using the indirect approach as a(n):
A) addition under financing activities
B) addition under investing activities
C) addition to net income in the operating activities section
D) deduction from net income in the operating activities section

Question

Quizplus · Accepted Answer

A loss from the sale of equipment is added back to net income in the operating activities section when using the indirect method for the cash flow statement. This is because the loss is a non-cash expense that reduced net income on the income statement, but it did not affect the company's cash flow.

A Loss from Sale of Equipment Would Appear on the Cash