On an indirect method statement of cash flows, a gain on the sale of capital assets is:
A) deducted from net income
B) reflected in the investing activities section
C) added to net income
D) reflected in the financing activities section

Question

Quizplus · Accepted Answer

Gains on the sale of capital assets are deducted from net income in the operating activities section of the indirect method statement of cash flows because these gains increase net income but do not involve cash inflows from operating activities.

On an Indirect Method Statement of Cash Flows, a Gain