When preparing the operating activities section of the statement of cash flows under the indirect method, losses on sales of equipment are omitted.

Name: When preparing the operating activities section of the statement of cash flows under the indirect method, losses on sales of equipment are omitted.
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Question

Quizplus · Accepted Answer

Losses on sales of equipment are added back to net income in the operating activities section under the indirect method because they are non-cash expenses that reduce net income.

When Preparing the Operating Activities Section of the Statement of Cash