Which of the following statements is false regarding how the cash flow effects of the changes in the equipment and accumulated depreciation accounts would be reported on a statement of cash flows if the indirect method is used to prepare the operating activities section?
A) Cash proceeds from the sale of the equipment would be reported as a cash inflow in the investing activities section.
B) The cash paid to purchase equipment would be reported as a cash outflow in the investing activities section.
C) Depreciation expense would be added to net income in the operating activities section.
D) A loss on the sale of the equipment would be subtracted from net income in the operating activities section.
D
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