1. Which of the following would be added to net income using the indirect method?

a. An increase in prepaid expenses.

b. Depreciation expense.

c. A decrease in accounts payable.

d. An increase in accounts receivable.

2. T/F Using the indirect method, an increase in accounts receivable during a period is deducted from net income in calculating cash provided by operations.

3. T/F A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method.

4.T/F In preparing a statement of cash flows, increases in the Common Stock and Treasury Stock accounts during a period would be investing activities

5. T/F Free cash flow equals cash provided by operations less capital expenditures and cash dividends.