Under the direct method, gains and losses on the sale of a fixed asset are reported in the investing section of the cash flow statement.

Question

Quizplus · Accepted Answer

Under the direct method, gains and losses on the sale of a fixed asset are not reported in the investing section of the cash flow statement; instead, the proceeds from the sale are reported. Gains and losses affect the operating section as adjustments to reconcile net income to net cash provided by operating activities.

Under the Direct Method, Gains and Losses on the Sale