88.Both the indirect and direct method of preparing a statement of cash flows begin with net income.
True False
89.A decrease in retained earnings may indicate a cash outflow occurred to pay a dividend.
True False
90.Under the indirect method losses are added and gains are subtracted when computing net cash flow from operating activities.
True False
91.Under the direct method, depreciation expense is added back to net income when computing net cash flow from operating activities.
True False
92.The direct method shows the specific sources and uses of cash that are associated with operating activities.
True False
93.The investing section of the statement of cash flows is the same regardless of whether the direct or indirect method is used.
True False
94.In preparing the statement of cash flows by the indirect method, a decrease in prepaid expenses would be added to net income.
True False
95.In preparing the statement of cash flows by the indirect method, an increase in inventory would be added to net income.
True False
96.In preparing the statement of cash flows by the indirect method, an increase in accounts payable would be subtracted from net income.
True False
97.In preparing the statement of cash flows by the indirect method, a decrease in a long-term investment account would be added to net income.
True False