In calculating cash flows from operating activities using the indirect method, a loss on the sale of equipment is
A)added to net income.
B)deducted from net income.
C)ignored because it does not affect cash.
D)not reported on a statement of cash flows.

Question

Quizplus · Accepted Answer

A loss on the sale of equipment is added back to net income in the indirect method because it is a non-cash expense that reduced net income but did not affect cash flow.

In Calculating Cash Flows from Operating Activities Using the Indirect