Governance Corporation Uses the Direct Method When Preparing Its Statement

question 35

Multiple Choice

Governance Corporation uses the direct method when preparing its statement of cash flows.Governance sold equipment with a book value of $13,000 at a loss of $3,000.The amount to be reported on the statement of cash flows under "proceeds from the sale of capital assets" is:

• A) $16,000
• B) $13,000
• C) $10,000
• D) $3,000

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Definitions:

Buying Allowance

A promotional or pricing strategy where buyers are given a specific discount or allowance on bulk purchases.

Sales Promotion

Marketing strategies aimed at stimulating demand for a product or service through short-term incentives or discounts to enhance purchase volume.

Derived Demand

The demand for a product or service that arises from the demand for another product or service linked to it.

Automotive Market

The sector of the economy that deals with the production, distribution, and sale of motor vehicles.