A loss on the sale of long-term assets is added back to net income to arrive at net cash flows from operating activities under the indirect method.

Question

Quizplus · Accepted Answer

A loss on the sale of long-term assets is added back to net income in the operating activities section of the cash flow statement when using 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 the Sale of Long-Term Assets Is Added