When Preparing the Operating Section of the Statement of Cash

question 71

True/False

When preparing the operating section of the statement of cash flows using the indirect method,nonoperating gains are added back to net income.

---

Definitions:

Types Of Earnings

Types of earnings refer to the various measures of income a company generates, such as net income, operating income, and earnings before interest and taxes (EBIT).

Unearned Rent

Income received by a landlord for which the services (use of property) have not yet been provided.

Notes Payable

A financial obligation or loan documented by a written promissory note, specifying the terms of repayment.

Mortgage Payable

A long-term liability account that records the amount owed on a property mortgage.