Amortization Expense Is Not Listed on a Direct-Method Cash Flow

question 210

True/False

Amortization expense is not listed on a direct-method cash flow statement since this item has no effect on cash.

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Definitions:

General Ledger

The master set of accounts that summarizes all transactions occurring within an entity, serving as the main accounting record.

Journal Entry

A record in accounting that notes the details of a financial transaction as it happens.

Stockholders' Equity

Represents the residual interest in the assets of a corporation after deducting liabilities. It typically includes common stock, preferred stock, retained earnings, and treasury stock.

Balance Sheet

A report detailing a corporation's assets, liabilities, and equity of its shareholders at a certain moment.