A gain on the sale of a plant asset in the ordinary course of business should be presented in a statement of cash flows prepared using the indirect method as
A) a cash inflow from investing activities.
B) a cash inflow from financing activities.
C) a deduction from net income.
D) an addition to net income.

Question

Quizplus · Accepted Answer

In the indirect method of the statement of cash flows, gains on the sale of plant assets are deducted from net income because they are non-cash items that increase net income but do not affect operating cash flow.

A Gain on the Sale of a Plant Asset in the Ordinary