Under the indirect method, a loss on the sale of equipment is added to profit in calculating cash provided by operating activities.

Name: Under the indirect method, a loss on the sale of equipment is added to profit in calculating cash provided by operating activities.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A loss on the sale of equipment is a non-cash expense that reduces net income, so it is added back to net income in the operating activities section of the cash flow statement when using the indirect method.

Under the Indirect Method, a Loss on the Sale of Equipment