If an Asset Is Sold at a Gain, Why Is

question 93

Essay

If an asset is sold at a gain, why is the gain deducted from net income when computing the net cash flows from operating activities under the indirect method?

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Definitions:

Verbal

relating to or involving words and the use of language to communicate.

Finke's Principles

Pertains to theories and concepts developed by cognitive psychologist Ronald A. Finke, emphasizing the imaginative creation and manipulation of visual images.

Visual Images

Mental representations of physical objects or scenes that are not currently being observed, often utilized in cognitive processes such as memory and imagination.

Visual Perception

The ability to interpret and make sense of visual stimuli from the environment through the process of sight.