Asked by Maria Mendez on May 13, 2024
Verified
Gain on sale of investments
A) Increase cash from operating activities
B) Decrease cash from operating activities
C) Increase cash from investing activities
D) Decrease cash from investing activities
E) Increase cash from financing activities
F) Decrease cash from financing activities
G) Noncash investing and financing supplement
Sale of Investments
The process of selling investments such as stocks, bonds, or real estate, typically to generate cash or realize gains.
Operating Activities
Activities that are directly related to the operation of the business, including cash flows from sales, expenses, and other main revenue-generating activities.
- Acknowledge the effect that depreciation, amortization, gains, and losses exert on the statement of cash flows.
Verified Answer
MA
Mohamad ali El haririMay 16, 2024
Final Answer :
B
Explanation :
Gains on the sale of investments are added back to net income in the operating activities section of the cash flow statement when using the indirect method because the gain is included in the net income figure but does not involve an actual cash transaction.
Learning Objectives
- Acknowledge the effect that depreciation, amortization, gains, and losses exert on the statement of cash flows.
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