If a Company Sells Equipment at a Loss,the Loss from Selling

question 56

True/False

If a company sells equipment at a loss,the loss from selling the equipment is reported in the investing activities section of the statement of cash flows.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed overhead—in the cost of a product.

Unit Product Cost

The calculation of the total cost (including materials, labor, and overhead) to produce a single unit of a product.

Variable Costing

A costing method in which all variable manufacturing costs are included as inventoriable costs, while fixed manufacturing overhead is treated as an expense of the period.

Net Operating Income

A company's operating income after all operating expenses, excluding taxes and interest, have been deducted.