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

Question

Quizplus · Accepted Answer

A gain on the sale of equipment is deducted from net income because it is a non-cash item that increased net income but did not affect operating cash flows.

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