In Computing Distributable Net Income (DNI) for a Trust, One

question 135

True/False

In computing distributable net income (DNI) for a trust, one removes any corpus net capital gain or loss.

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Definitions:

Direct Method

A way of preparing the cash flow statement where actual cash flow information from the company's operations is used, directly showing sources and uses of cash.

Cost Allocation

The distribution or assignment of indirect, common, or joint costs to different departments, processes, or products within an organization.

Step-Down Method

A cost allocation method used in accounting that allocates overhead costs to cost objects in a sequence, where each department allocates its costs to other departments based on a predetermined order.