1. Determining net cash flows from operating activities using the indirect method reveals cash collected from customers.

True

False

2. For purposes of preparing the statement of cash flows, cash is defined as including both cash and cash equivalents.

True

False

3.Interest paid on bonds payable would be included in the financing activities category on the statement of cash flows.

True

False

4. Interest received on investments would be included in the operating activities category on the statement of cash flows.

True

False

5. Investors could use the statement of cash flows to determine whether the company will be able to pay dividends and interest.

True

False

6. Noncash investing and financing transactions, such as the exchange of a long-term asset for a long-term liability, represent significant investing and financing activities and are reflected in a separate schedule as part of the statement of cash flows.

True

False

7. Purchases and sales of long-term investments for the period should be netted for disclosure in the investing activities section of the statement of cash flows.

True

False

8. Since investing activities center on the long-term assets shown on the balance sheet, they do not include any short-term investments shown under current assets on the balance sheet

True

False

9. Since it impacts Retained Earnings, the net income for the period would appear in the cash flows from financing activities section of a statement of cash flows prepared using the indirect method.

True

False

10. The acquisition of treasury stock with cash is shown as a financing activity on the statement of cash flows.

True

False