A loss on the disposal of a non-current asset
A)Involves cash inflows
B)Involves cash outflows
C)Does not reflect any cash flow
D)Is the result of an investing activity
E)Does not reflect any cash flow and is the result of an investing activity

Question

Quizplus · Accepted Answer

A loss on the disposal of a non-current asset does not directly reflect any cash flow because it is an accounting entry that represents the difference between the book value of the asset and the proceeds from its sale. However, the disposal itself is considered an investing activity, as it involves the sale of a long-term asset.

A Loss on the Disposal of a Non-Current Asset