On the cash flow statement using the indirect method, a loss on the sale of equipment will
A) be added to profit in the operating section.
B) be deducted from profit in the operating section.
C) appear as an inflow of cash in the investing section.
D) appear as an outflow of cash in the investing section.

Question

Quizplus · Accepted Answer

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

On the Cash Flow Statement Using the Indirect Method, a Loss