Under the direct method,a gain from the sale of a fixed asset is added to net income when calculating cash flows from operations.

Question

Quizplus · Accepted Answer

The direct method includes only cash transactions in the operating section of the cash flow statement, and therefore does not consider gains from the sale of fixed assets as a part of operating cash flows. These gains are instead reported in the investing section of the cash flow statement under the direct method.

Under the Direct Method,a Gain from the Sale of a Fixed