For Reporting Operating Cash Flows Under the Indirect Method, a Company

question 57

True/False

For reporting operating cash flows under the indirect method, a company adds an unrealized holding loss on trading securities to net income to help adjust net income from an accrual basis to a cash basis.

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Definitions:

Flood

An overflow of water that submerges land that is usually dry, often caused by heavy rain, melting snow, or breach in water containment systems.

Inputs

Resources used in the process of production, including labor, materials, and capital.

Derived Demand

Derived demand occurs for a factor of production when the demand for another good or service drives it, such as the demand for raw materials increasing due to higher demand for the final product.

Factor of Production

An economic resource used in the production of goods and services, including labor, capital, land, and entrepreneurship.