A gain on the sale of long-term assets is added to net income to arrive at net cash flows from operating activities under the indirect method.

Question

Quizplus · Accepted Answer

A gain on the sale of long-term assets is a non-operating activity and should be reported in the investing section of the statement of cash flows under the indirect method. It should not be added to net income in the operating section.

A Gain on the Sale of Long-Term Assets Is Added