A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method.

Name: A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method.
Brand: Quizplus
Rating: 4.9 (52 reviews)

Question

Quizplus · Accepted Answer

A loss on sale of equipment is added back to net income in the calculation of cash flow from operations under the indirect method because it is a non-cash expense that reduced net income but did not involve an outflow of cash.

A Loss on Sale of Equipment Is Added to Net