When preparing the operating section of the statement of cash flows using the indirect method, which of the following items are added to net income?
A) decrease in accounts payable
B) unrealized gains on trading securities
C) loss on sale of equipment
D) increase in merchandise inventory

Question

Quizplus · Accepted Answer

Loss on sale of equipment is added back to net income in the operating section of the cash flow statement because it is a non-cash expense that reduced net income.

When Preparing the Operating Section of the Statement of Cash