2) Which of the following statements regarding the direct and indirect methods of reporting cash flow from operating activities is false? A) The direct method shows the specific cash inflows and outflows constituting the aperating activities of the business. 5 Under the indirect method, the computation of net cash flow from operating activities begins with net income as shown in the income statement. O TThe FASS permits both the direct and the indirect methods, but has expressed a prefference for the direct method. D) Although both methods result in the same net increase or decrease in cash for the year, net cash flow from operating activities will be different under the two methods 22) When determining the uncollectible accounts expense in computing taxable income, ncome tax regulations A) Require the income statement approach. B) Require the direct write-off method. O Require the alliowance method D) Allow any method. 23) The statement of cash flows of Bosley Corporation shows the amount of cash received from customers as $720,000. If net sales in Bosley Corporation's income statement are reported at $670,000 then: A) Bosley's accounts receivable are s50,000 at the end of the year B) Bosley's accounts receivable increased $50,000. O Bosley's Cash account decreased $50,000. D) Bosley's accounts receivable decreased $50,000 of net sales in computing the amount of uncollectible 24) If a company uses a percentage accounits expense A) The relationship between revenue and expenses is being stressed more than the valuation of receivables at the balance sheet date. B) No valuation allowance will be required. The existing balance in the Allowance for Doubtful Accounts will be increased sufficiently to equal the probable loss indicated by the percentage of net sales computation. D) Any past-due accounts will be listed as a separate item in the balance sheet. 25) When the account Allowance for Doubtful Accounts is used, writing off of an uncollectible accounts receivable will: A) Not change income or total assets. O) Reduce income. B) Increase total assets. D) Reduce an expense. 26) Under the allowance method, when a receivable that had been previously written off is collected A) Net assets are increased. C Income is recognized. B) Net income is not affected. D) An expense is reduced