108.In preparing the statement of cash flows by the indirect method, an increase in a current asset is subtracted from net income.
True False
109.In preparing the statement of cash flows by the indirect method, a decrease in a current liability is deducted from net income.
True False
110.In preparing the statement of cash flows by the indirect method, noncash revenues and gains are added to net income.
True False
111.Bowman Corporation's sales for 2014 were $300,000, and the balance in its accounts receivable increased by $8,000 during the year. In 2014, Bowman collected $308,000 in cash from its customers.
True False
112.Gates Corporation reported utilities expense of $112,800 on its income statement for 2014. For the year, the beginning balance in utilities payable was $8,000 and the ending balance was $4,000. The amount of cash that Gates paid for utilities in 2014 was $116,800.
True False
113.Baltimore Company reported revenue of $124,000 on its 2014 income statement. The balance in its unearned revenue account was $6,000 at the start of 2014 and $2,000 at the end of the year. Based on this information alone, the amount of cash that Baltimore collected from customers for 2014 was $120,000.
True False
114.The indirect method of preparing the statement of cash flows is preferred by the Financial Accounting Standards Board.
True False
115.Dividends received from investments in marketable securities reported as investing activities in the statement of cash flows.
True False
116.All cash exchanges between a company and its owners are reported as investing activities in the statement of cash flows.
True False
117.Jennings Company issued a $250,000 note to purchase a building. Jennings would report the event as a noncash investing and financing activity.
True False
118.Frost Company reported a $4,000 increase in dividends payable, a $60,000 increase in retained earnings, and $64,000 in net income for 2014. Based on this information, the company must have paid dividends equal to $4,000 during 2014.
True False
119.Only the principle portion of a mortgage payment is considered to be a cash outflow for financing activities.
True False
120.Under the indirect method, an increase in wages payable would be added back to net income when calculating net cash flow from operating activities.
True False
121.Increases in long-term asset balances indicate cash outflows to purchase assets.
True False
122.Under the direct method, cash payments to suppliers would be reported in the operating section of a cash flow statement.
True False