Using the Indirect Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the indirect method.
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When using the indirect method, where is the gain from selling a long-term investment appear on the statement of cash flows? (The proceeds from selling the investment are considered separately.)
A) Operating activity
B) Investing activity
C) Financing activity
D) Financing and Investing activities

Question

Using the Indirect Method 
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the indirect method.
-
When using the indirect method, where is the gain from selling a long-term investment appear on the statement of cash flows? (The proceeds from selling the investment are considered separately.)
A) Operating activity
B) Investing activity
C) Financing activity
D) Financing and Investing activities

Quizplus · Accepted Answer

The gain from selling a long-term investment is deducted from net income in the operating activities section when using the indirect method.