TRUE/FALSE
1.The statement of cash flows can be thought of as a “cash-basis” income statement.
2.The sale of equipment is a financing activity.
3.The statement of cash flows is the only financial statement prepared on an accrual basis.
4.The payment of wages is a financing activity.
5.When determining cash flows from operating activities using the indirect format, depreciation expense is subtracted from net income.
6.Decreases in current liability accounts are added to net income in computing cash flows from operating activities, using the indirect format.
7.Since the amortization of an intangible asset does not affect cash, it does not appear on the cash-flow statement using the indirect method.
8.In the long run, a firm must depend on its operating activities to meet most of its cash flow needs.
9.A firm that has negative cash flows from operating activities and positive cash flows from investing and financing activities is experiencing prosperous growth.
10.A combination of positive cash flows from operating activities and negative cash flows from investing activities can be a sign of good performance and growth.