When preparing the operating activities section of the statement of cash flows using the indirect method, non-operating gains are added to net income.

Question

Quizplus · Accepted Answer

Non-operating gains are not a part of operating activities and therefore should not be added to net income when preparing the operating activities section of the statement of cash flows using the indirect method. Non-operating gains are included in the investing and financing activities sections of the statement of cash flows.

When Preparing the Operating Activities Section of the Statement of Cash