Under the indirect approach adjustments must be made to net income in the operations section for all of the following items, except:
A)amortization
B)gain on the sale of equipment
C)loss on the sale of land
D)proceeds for the sale of temporary investments

Question

Quizplus · Accepted Answer

Proceeds from the sale of temporary investments are already reported in the investing section, so no adjustment is needed in the operations section of the statement of cash flows. However, all of the other items listed (amortization, gain/loss on the sale of assets) require adjustments to net income in the operations section.

Under the Indirect Approach Adjustments Must Be Made to Net