We need to add back to net income any loss on sale of long-term assets in the operating section of the statement of cash flows in order to eliminate the noncash component of net income.

Question

Quizplus · Accepted Answer

Losses on the sale of long-term assets are added back to net income in the operating section of the cash flow statement to adjust for non-cash components and reflect the actual cash flow.

We Need to Add Back to Net Income Any Loss