Due to the Rapid Advance of Information Technology a $1,500

question 4

True/False

Due to the rapid advance of information technology a $1,500 computer today is far more powerful than a $10 million computer of the 1970s.

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Definitions:

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for changes in balance sheet accounts to calculate operating cash flow.

Operating Activities

Cash flow actions related to the day-to-day operations of a business, such as receiving cash from customers and paying suppliers.

Direct Method

An allocation method that directly assigns service department costs to producing departments without any intermediate allocations.