Under the Indirect Method,changes in Current Assets Are Used in Determining

question 138

True/False

Under the indirect method,changes in current assets are used in determining cash flows from operating activities and changes in current liabilities are used in determining cash flows from financing activities.Both changes in current assets and current liabilities are used in determining cash flows from operating activities.

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Definitions:

Accumulated Depreciation

Full amount of depreciation expenses that have been attributed to a fixed asset since it was deployed.

Financial Statements

Reports that summarize the financial performance and health of a business including balance sheet, income statement, and cash flow statement.

Balance Sheet

A summary record that outlines a firm's assets, liabilities, and equity held by shareholders at a specific timeframe, showing its financial status.

Statement of Owner's Equity

A financial statement that outlines the changes in the equity of a company over a specific period, including contributions, withdrawals, and the net income or loss.