Black Corporation Entered into the Following Transactions: • the Accrual

Multiple Choice

Black Corporation entered into the following transactions: • The accrual of wages and salaries expense.
• The cash sale of equipment for a loss.
• The cash payment in advance for a one-year insurance policy.
Which of the following statements is correct with respect to determining Black's cash flows from operating activities on the statement of cash flows?

A) The accrual of wages and salaries expense is subtracted from net income.
B) The loss on the equipment sale is subtracted from net income.
C) The cash payment to purchase the insurance policy is subtracted from net income.
D) The accrual of wages and the equipment loss are both subtracted from net income.