In calculating cash flows provided (used) by operating activities using the indirect method, a loss on the sale of equipment is
A)added to profit.
B)deducted from profit.
C)ignored because it does not affect cash.
D)not reported on a statement of cash flows.

Question

Quizplus · Accepted Answer

A loss on the sale of equipment is added back to profit in the indirect method because it is a non-cash expense that reduced net income.

In Calculating Cash Flows Provided (Used) by Operating Activities Using