If a Company Uses the Direct Method of Calculating Cash

question 28

True/False

If a company uses the direct method of calculating cash flows from operating activities,it must adjust net income for gains or losses when selling property,plant,and equipment.A company must make adjustments for gains and losses only when the indirect method is used to present cash flows from operating activities.

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Definitions:

Drunken Driving

The illegal act of operating a vehicle while impaired by the effects of alcohol, leading to reduced driving skills, slower reaction times, and increased risk of accidents.

Groupthink

A process in which group members are influenced by cohesiveness and a dynamic leader to ignore external realities as they make decisions.

Prejudices

Preconceived opinions or judgments toward people, objects, or situations based on biases, without factual knowledge.

Stereotyping

Erroneous assumptions that all members of a group share the same traits or characteristics.