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

Question

Quizplus · Accepted Answer

Non-operating losses, which are not related to the company's primary business activities, are not added to net income in the operating activities section. Instead, they are included in the investing or financing activities sections, depending on the type of loss.

When Preparing the Operating Activities Section of the Statement of Cash