When Preparing the Operating Activities Section of the Statement of Cash

question 130

True/False

When preparing the operating activities section of the statement of cash flows using the indirect method,non-operating gains are subtracted from net income.

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Definitions:

Performance Obligations

Promises in a contract to transfer goods or services to a customer, central to revenue recognition principles.

Transaction Price

The total monetary value exchanged or agreed upon in a transaction.

Revenue Recognition

The accounting principle that dictates the conditions under which income becomes recognized as revenue.

Core Principle

A fundamental belief or guideline that serves as a foundation for a system of belief or behavior or for a chain of reasoning.