When a fixed asset is sold for other than its book value, which one of the following incorrectly states the effect of this transaction on a company's statement of cash flows?
A) Under the direct method, no gain or loss from the sale of fixed assets is included in the operating activities section.
B) Under the indirect method, gains from the sale of fixed assets are subtracted from net income in the operating activities section.
C) Under the indirect method, losses from the sale of fixed assets are added back to net income to arrive at net cash from operations.
D) Losses and gains from the sale of fixed assets are operating items to be listed in the operating activities section under both the direct and indirect methods.
E) Under both the direct and indirect methods, the sale of a fixed asset would affect the investing activities section.
D
You might also like to view...
When large companies can no longer defend their full territory, they can launch a ________ defense where they give up weaker markets and reassign resources to stronger ones
A) contraction B) preemptive C) flank D) mobile E) position
________ is the impact on business performance resulting from executing specific marketing activities
A) Return on marketing investment B) Market assessment C) Marketing accountability D) Brand health E) Brand attribute