CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

A loss on the sale of property, plant, and equipment should be ______ in computing cash flow from operating activities.
A. added to net income
B. subtracted from net income
C. subtracted from net sales
Explanation: A loss on the sale of a long-lived asset is subtracted in determining net income. Because a loss on the sale of a long-lived asset does not represent an operating activity, it must be added to net income to determine cash flow from operating activities.

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