For a Firm Using the Indirect Method,a Loss on the Sale

question 56

True/False

For a firm using the indirect method,a loss on the sale of equipment should be added back to net income to arrive at cash flow from operations.

---

Definitions:

Articles of Incorporation

A document filed with a state government to legally document the creation of a corporation.

Corporation

A legal entity that is separate and distinct from its owners, which can enter into contracts, own assets, sue and be sued.

Piercing the Corporate Veil

A legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders or directors.