In a statement of cash flows in which operating activities are reported by the direct method, which of the following would increase reported cash flows from operating activities?
A)Gain on sale of equipment.
B)Interest revenue.
C)Gain on early extinguishment of bonds.
D)Proceeds from sale of lanD.The two gains are not cash flows.Proceeds from the sale of land are reported as a component of investing activities.

Question

Quizplus · Accepted Answer

Interest revenue is a cash inflow from operating activities and would increase reported cash flows from operating activities. The other options, gain on sale of equipment and gain on early extinguishment of bonds, are not cash inflows from operating activities and therefore would not increase reported cash flows from operating activities. Proceeds from the sale of land are reported as a component of investing activities, not operating activities.

In a Statement of Cash Flows in Which Operating Activities