Which one of the following is subtracted from net income when using the indirect method to determine cash flows from operations?
A)Loss from sale of land
B)Depreciation expense
C)Stock dividends declared and distributed
D)Gain from sale of equipment

Question

Quizplus · Accepted Answer

When using the indirect method to determine cash flows from operations, gains from the sale of equipment (or any other non-current asset) are subtracted from net income. This is because the gain is included in the net income figure, but it does not represent a cash flow from operating activities; it's a cash flow from investing activities.

Which One of the Following Is Subtracted from Net Income