Under the indirect approach,adjustments must be made to net income in the operations section for all of the following items,except A)depreciation. B)gain on the sale of equipment. C)loss on the sale of land. D)proceeds for the issuance of preferred shares.

Question

Quizplus · Accepted Answer

Proceeds for the issuance of preferred shares is not an item that affects net income in the operations section, therefore, adjustments do not need to be made for it under the indirect approach. However, depreciation, gain/loss on the sale of assets all affect net income and require adjustments under the indirect approach.

Under the Indirect Approach,adjustments Must Be Made to Net Income