While Preparing the Statement of Cash Flows Using the Indirect

question 111

True/False

While preparing the statement of cash flows using the indirect method, a loss on the sale of plant assets must be shown as a subtraction from the investing activities section.

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Definitions:

Debt Financing

The method of raising capital through the sale of bonds, bills, or notes to individuals or institutional investors which must be repaid at a later date.

Equity Financing

The process of raising capital through the sale of shares in a company.

Term

The time until a debt security’s principal is due to be repaid. Also called the debt’s maturity or time until maturity.

Indirect Transfers

Transactions where assets or money move between entities or locations via intermediaries rather than through a direct exchange.