A company uses the indirect method to prepare the statement of cash flows.How will a gain from the sale of equipment be presented on the statement?

Question

Quizplus · Accepted Answer

The gain from the sale of equipment is a non-operating item and is not related to the company's core operations. As per the indirect method, non-operating items are adjusted from net income in the operating activities section. Therefore, a gain from the sale of equipment will be deducted from net income in the operating activities section.

A Company Uses the Indirect Method to Prepare the Statement