A gain or loss from selling equipment is reported under cash flows from operating activities using the direct method.The direct method converts revenues to cash inflows and expenses to cash outflows to arrive at net cash flow from operating activities.Since gains and losses are noncash amounts,they are not used in calculating operating cash flows using the direct method.

Question

Quizplus · Accepted Answer

A gain or loss from selling equipment would be reported under cash flows from investing activities, not operating activities.

A Gain or Loss from Selling Equipment Is Reported Under