When preparing the operating activities section of the statement of cash flows under the indirect method, gains on sale of equipment are subtracted from net income.

Name: When preparing the operating activities section of the statement of cash flows under the indirect method, gains on sale of equipment are subtracted from net income.
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Question

Quizplus · Accepted Answer

Gains on sale of equipment are subtracted from net income because they are non-cash items that increase net income but do not affect cash flow from operating activities.

When Preparing the Operating Activities Section of the Statement of Cash