A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method. A. True
B. False

A. True

Explanation: In creating a statement of cashflow, the direct or Indirect method may be employed. The Indirect method simply starts from the net income or loss by making necessary adjustment to the net income before arivubg at cash made from operating activities. Hence, Indirect methods starts calculation from the net income. This is the opposite in direct method whereby cash inflows and outflows from operating activities are used to arrive at the net income or cashflow.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation: