On a statement of cash flows(indirect method),which item is reported as a line item under Cash From Operating Activities?
A)Sale of securities
B)Purchase of fixed assets
C)Purchase of securities
D)Amortization Expense

Question

Quizplus · Accepted Answer

Amortization Expense is reported as a line item under Cash From Operating Activities on the statement of cash flows using the indirect method, as it is a non-cash expense that is added back to net income to arrive at operating cash flows. The other options, (A) Sale of securities and (C) Purchase of securities, would be reported under Cash From Investing Activities, while (B) Purchase of fixed assets would be reported under Cash From Investing or Financing Activities, depending on whether the acquisition of the assets was funded through cash or financing activities.

On a Statement of Cash Flows(indirect Method),which Item Is Reported