Question

On the cash flow statement, a realized loss on investments should be added back under Cash from Operating Activities because the realized loss decreases net assets but does not use up any cash.

a. True
b. False

Answer 1

The answer is A. TRUE

Step-by-step explanation:

Realized loss like depreciation or amortization are added back to the net income under the cash flow from operating activities section.

Realized gain/loss is the total amount of realized gains and losses resulting from the sale of investment or securities.

This is usually done under the indirect method of cash flow. This does not occur under the direct method of cash flow