On the statement of cash flows prepared by the indirect method, the Cash flows from operating activities section would include
A) receipts from the sale of investments
B) gains or losses on fixed assets
C) payments for cash dividends
D) receipts from the issuance of capital stock

Question

Quizplus · Accepted Answer

Gains or losses on fixed assets are included in the Cash flows from operating activities section when preparing the statement of cash flows by the indirect method. This is because these gains or losses are adjustments to reconcile net income to net cash provided by operating activities, as they do not involve cash flows themselves but affect the net income.

On the Statement of Cash Flows Prepared by the Indirect