When preparing a statement of cash flows using the indirect method, each of the following should be classified as an operating cash flow except:
A) A decrease in accounts payable.
B) Proceeds from the disposal of a long-term asset with no gain or loss.
C) An increase in accounts receivable.
D) A decrease in accrued expenses payable.
E) An increase in prepaid expenses.

Question

Quizplus · Accepted Answer

Option B, proceeds from disposal of long-term assets, should be classified as an investing cash flow, not an operating cash flow. The other options listed are changes in current assets or liabilities, which are classified as operating cash flows.

When Preparing a Statement of Cash Flows Using the Indirect