When preparing the statement of cash flows using the indirect method,which statement is FALSE?
A)Gains on the sale of long-term assets are subtracted from net income.
B)Losses on the sale of long-term assets are subtracted from net income.
C)Depreciation expense is added to net income.
D)Increases in current liabilities are added to net income.

Question

Quizplus · Accepted Answer

Losses on the sale of long-term assets are added to net income, not subtracted, when using the indirect method for the statement of cash flows.

When Preparing the Statement of Cash Flows Using the Indirect