GASB Requires the Indirect Method to Determine Cash Flows from Operating

question 24

True/False

GASB requires the indirect method to determine cash flows from operating activities.

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Definitions:

Fair Value

Fair value is an estimate of the market value of an asset, based on its current price in a fair and open market transaction.

Bonus Method

A method in accounting for partnerships where a new partner's investment is recorded at an amount that is different from the stated value of the partnership's net assets, affecting the capital accounts of the existing partners.

Journal Entry

A journal entry is a record of a business transaction in the accounting books, detailing the financial effects of that transaction.

Net Income

The company's net income following the deduction of all costs and taxes from its earnings.