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(41 of 50) Which section of the Cash Flow Statement would include losses on the sale...

(41 of 50)

Which section of the Cash Flow Statement would include losses on the sale of furniture?

Operating activities

Investing activities

Financing activities

Losses are not shown on the Cash Flow Statement.

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Homework Answers

Answer #1

Cashflow statement include the transactions which have the cash effect i.e. either increase or decrease in the cash balance

Losses on sale of furniture is non cash item, as loss on sale of furniture is just difference between book value of asset - sale price of asset.

It doesn't affect any cash balance.

Hence such losses are not shown in cash flow statement.

Option 4 is correct

answer is based on direct method of cash flow statement

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