A gain on the sale of a plant asset in the ordinary course of business should be presented in a statement of cash flows prepared using the indirect method as
A) a cash inflow from investing activities.
B) a cash inflow from financing activities.
C) an addition to net income.
D) a deduction from net income.

Question

Quizplus · Accepted Answer

In the indirect method of the statement of cash flows, gains from the sale of plant assets are deducted from net income in the operating activities section because they are non-cash items that are included in net income but do not affect cash flow from operating activities.

A Gain on the Sale of a Plant Asset in the Ordinary