A Gain on Sale of Equipment Is Subtracted from Net

question 113

True/False

A gain on sale of equipment is subtracted from net income when determining Net cash provided by operating activities under the indirect method of preparing the statement of cash flows.

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Definitions:

Obligation Imposed

A duty or responsibility enforced by law, regulation, or agreement.

Contract Formation

The process whereby parties agree upon and establish the terms of a contract, leading to a binding legal agreement.

Relaxation of Requirements

The easing or reduction of stringent rules, standards, or conditions, often to accommodate special circumstances.

Material Misrepresentation

A statement that is significantly untrue or misleading and, if known to be such, could have influenced the decision-making of a party in a contract or agreement.