A corporation uses the indirect method for preparing the statement of cash flows. A fixed asset has been sold for $25,000 representing a gain of $4,500. The value in the operating activities section regarding this event would be
A) $25,000
B) $(4,500)
C) $29,500
D) $4,500

Question

Quizplus · Accepted Answer

The gain on the sale of the fixed asset is an investing activity, not an operating activity. Therefore, the value in the operating activities section would be negative the amount of the gain, or $(4,500).

A Corporation Uses the Indirect Method for Preparing the Statement