In calculating cash flows from operating activities using the indirect method, a loss on the sale of equipment will appear as
A) a subtraction from profit.
B) an addition to profit.
C) an addition to cash flow from investing activities.
D) a subtraction from cash flow from investing activities.

Question

Quizplus · Accepted Answer

A loss on the sale of equipment is added back to profit when calculating cash flows from operating activities using the indirect method, because it is a non-cash expense that reduced net income but did not involve an outflow of cash during the period.

In Calculating Cash Flows from Operating Activities Using the Indirect