Under the Direct Method of Preparing a Statement of Cash

question 98

True/False

Under the direct method of preparing a Statement of Cash Flows, the gain on the sale of land is not adjusted or reported as part of cash flows from operating activities.

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Definitions:

Special Warranty Deed

A deed which promises only that the seller has not done anything to lessen the value of the estate.

Fee Simple Absolute

The most extensive form of property ownership, granting the holder complete control over the property, with the right to use, lease, or sell.

Fair Market Value

The price that a willing and informed buyer would pay to a willing and informed seller when neither is under duress to buy or sell.

Public Purpose

Justification for government action or policy that is intended to benefit the public at large or improve public welfare.