Under the Direct Method of Preparing the Statement of Cash

question 34

True/False

Under the direct method of preparing the statement of cash flows, the major source of cash receipts is cash received from the sale of property, plant and equipment.

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Definitions:

Liquid Assets

Refers to assets that can be quickly and easily converted into cash without significant loss in value.

Disposable Income

Monetary resources for household use in saving and spending subsequent to income tax deductions.

Consumption

The act of using goods and services for personal needs or wants, including basics like food and housing to luxury items.

Disposable Income

Resources allocated for household expenditure and savings after income tax expenses.