Accounting Chapter 12 T/F

An increase in common stock would be an listed as an investing activity when preparing the statement of cash flows under the indirect method.

False

Cash paid as dividends to stockholders is classified as a cash flow from investing activities in a statement of cash flows.

False

Cash paid for interest on a loan is classified as a cash flow from financing activities in a statement of cash flows.

False

Depreciation expense is deducted from net income in determining cash flows provided by operating activities under the indirect method.

False

In preparing the net cash flow from investing and financing activities, we can use an indirect method.

False

Net income is typically equal to Net Cash Provided by Operating Activities on the statement of cash flows.

False

Only the balance sheet is used to prepare the statement of cash flows.

False

A gain on sale of equipment is subtracted from net income when determining Net Cash Provided by Operating Activities under the indirect method.

True

Cash received from the sale of one of a company's warehouses is classified as a cash flow from investing activities in a statement of cash flows.

True

Information about noncash investing and financing activities must be disclosed ina schedule that is separate from the statement of cash flows.

True

The direct method of presenting the net cash flow from operating activities shows the major categories of operating cash receipts and payments.

True

The statement of cash flows is presented for a period of time.

True

Using the indirect method to prepare the statement of cash flows, an increase in accounts receivable is subtracted from net income in calculating Net Cash Provided by Operating Activities.

True