Under the Indirect Method,depreciation,increase in Inventories,and "Non-Operating" Losses Are Added

question 132

True/False

Under the indirect method,depreciation,increase in inventories,and "non-operating" losses are added to net income to arrive at net cash flow from operating activities.

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Definitions:

Accrued Expenses

Expenses that have been incurred but not yet paid or recorded in the company's financial statements.

Accrued Revenues

Revenues that have been earned but not yet received in cash or recorded at the statement date, common in service-related transactions.

Adjusting Entry

An accounting entry made in the books at the end of an accounting period to allocate revenues and expenditures to the period in which they actually occurred.

Accrued Expenses

Expenses that have been incurred but not yet paid or recorded in the financial statements, representing future obligations.