Under the Indirect Method,instead of Reporting Cash Receipts and Payments,net

question 59

True/False

Under the indirect method,instead of reporting cash receipts and payments,net income is reconciled with net cash from operating activities.

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Definitions:

GAAP

GAAP stands for Generally Accepted Accounting Principles, which are a collection of commonly-followed accounting rules and standards used in the United States for financial reporting.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that guide the preparation of financial statements globally.

Investment Classifications

The categorization of investment assets based on their characteristics, risks, and potential returns, such as stocks, bonds, and real estate.

Gain or Loss

Gain or loss refers to the financial result from the sale of a capital asset, where a gain occurs if the sale price exceeds the purchase cost, and a loss occurs if the sale price is below the purchase cost.