GAAP Requires That Exchanges of Assets Must Be Categorized as Like-Kind

question 148

True/False

GAAP requires that exchanges of assets must be categorized as like-kind or dissimilar assets.

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Definitions:

Investing Activities

Transactions and events related to the acquisition and disposal of long-term assets and other investments not considered cash equivalents.

Financing Activities

Transactions that involve raising capital or repaying investors, such as issuing shares or taking out loans.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet items to obtain net cash flow from operating activities.

Direct Method

A cash flow statement preparation approach that lists major operating cash receipts and payments, providing a clear view of operating cash flows.