The income statement shows a loss of $5,000 on the sale of equipment.As a result,the statement of cash flows would report
A) $5,000 as an increase in cash provided by investing activities.
B) $5,000 as a decrease in cash used in investing activities.
C) $5,000 as an increase in cash provided by operating activities.
D) $5,000 as a decrease in cash used in operating activities.

Question

Quizplus · Accepted Answer

The loss on the sale of equipment is added back to net income in the operating activities section of the cash flow statement because it is a non-cash expense that reduced net income.

The Income Statement Shows a Loss of $5,000 on the Sale