When a Company Uses the Indirect Method to Present the Statement

question 80

True/False

When a company uses the indirect method to present the statement of cash flows,cash received from the sale of a long-term asset increases the amount of net cash provided by investing activities.

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Definitions:

Cost Effective

This term refers to an approach or solution that provides the best possible outcome or value for the money spent, often used in evaluating projects or investments.

Cash Receipts Journal

A special journal that records all cash received.

Subsidiary Ledger

A detailed ledger that contains the breakdown of individual accounts, which supports the balances shown in the general ledger.

Control Accounts

Summary accounts in the general ledger that consolidate the details recorded in subsidiary ledgers for management and reporting purposes.