Like Divestitures or Equity Carve-Outs, the Spin-Off Generally Results in an Infusion

question 42

True/False

Like divestitures or equity carve-outs, the spin-off generally results in an infusion of cash to the parent company.

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Definitions:

Adjusting Entry

An accounting entry made in the general ledger at the end of an accounting period to allocate income and expenditure to the correct periods.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to usage, wear and tear, or obsolescence.

Office Equipment

Tangible assets such as desks, computers, and printers used in the operations of an office.

Production Equipment

Tools or machinery used in the manufacturing process to create products.