In Creating a Cash Flow Statement Using the Indirect Method,a

question 61

True/False

In creating a cash flow statement using the indirect method,a gain on the sale of non-current assets must be shown as an addition to Profit in the operating activities section.

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Definitions:

FOB Shipping Point

A shipping term indicating that the buyer takes responsibility for the goods and covers shipping costs from the point of departure.

Debit Memo

A document issued by a buyer to a seller to correct errors, reduce amounts owed, or return funds in the case of an overpayment.

Perpetual Inventory System

An inventory management system where updates are made continuously as transactions occur, keeping a real-time track of inventory levels.

Freight Charges

Costs associated with the transportation of goods, typically paid by the shipper to the carrier.