If a Company Uses the Indirect Method to Determine Net

question 69

Multiple Choice

If a company uses the indirect method to determine net cash flows from operating activities:

• A)gains on the disposal of equipment must be added to net income and losses subtracted from net income.
• B)gains on the disposal of equipment must be added to net income but losses are adjusted against the original asset account.
• C)gains on the disposal of equipment must be subtracted from net income and losses added to net income.
• D)there is no entry for a gain or loss on the disposal of equipment as this is only an Investing activity.

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Definitions:

Taste Buds

Small sensory organs located on the tongue, capable of detecting the five basic taste sensations: sweet, salty, bitter, sour, and umami.

Chromosomes

Threadlike structures located inside the nucleus of animal and plant cells, made of protein and a single molecule of deoxyribonucleic acid (DNA).

Dizygotic

Referring to twins that are developed from two separate eggs fertilized by two different sperm cells (fraternal twins).

Chromosome

A thread-like structure of nucleic acids and protein found in the nucleus of most living cells, carrying genetic information in the form of genes.