Question
Why is a gain on sale of assets subtracted in the indirect method for CFO?
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Answer
It is non-operating and belongs in CFI.
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Question
Under the indirect method, what is the starting point for calculating CFO?
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Answer
Net income.
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Question
Why do dividends paid reduce retained earnings as well as cash?
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Answer
They are distributions to owners, lowering CFF cash and equity.
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Question
How does debt issuance affect both the cash flow statement and the balance sheet?
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Answer
It increases cash in CFF and increases long-term liabilities.
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