Avatar Company Uses the Indirect Method to Prepare the Statement

question 150

True/False

Avatar Company uses the indirect method to prepare the statement of cash flows. Please refer to the following section of the comparative balance sheet:
The change in accrued liabilities will be shown as a positive cash flow in the adjustments to Net income.

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Definitions:

Discontinued Item

Pertains to the gains or losses from operations of a component of a business that has been disposed of or is held for sale.

Intangibles

Assets that do not have physical form, such as patents, trademarks, and goodwill, but are valuable to a business.

Amortized Cost

The accounting method that gradually reduces the book value of an intangible or tangible asset through periodic charges to income.

IFRS

International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that outline how financial statements should be prepared and disclosed.