37) Receiving a payment for an account receivable previously written off requires both a debit and a credit to accounts receivable. Answer: TRUE OR FALSE 38) When using the allowance method, writing off an account receivable will increase expenses in the current period. Answer: TRUE OR FALSE 39) When writing off a specific customer account using the income statement approach under the allowance method A) Allowance for Doubtful Accounts decreases and Bad Debts Expense increases. B) Bad Debts Expense increases and Accounts Receivable decreases. C) Accounts Receivable increases and Allowance for Doubtful Accounts increases. D) Allowance for Doubtful Accounts decreases and Accounts Receivable decreases. 40) The journal entry to write off an uncollectible account under the allowance method would include a credit to A) Sales. B) Accounts Receivable. C) Allowance for Doubtful Accounts. D) Bad Debts Expense. 45) Investing flows describe short-term asset acquisitions and the proceeds from sale of shortterm assets. Answer: TRUE OR FALSE 46) Cash flow information is used to predict future cash flows and to assess liquidity, the ability of a firm to pay dividends and obligations and for other purposes. Answer: TRUE OR FALSE 47) In Cash flow statement Depreciation Expense should be added back to Operating activities section. Answer: TRUE OR FALSE 48) The main objectives in preparing cash flow statement is to analyze transactions to identify all cash flows, reconcile items and non-cash transactions. Answer: TRUE OR FALSE 49) Operating flows are related to the main activities of the business and are connected to the earnings process. Answer: TRUE OR FALSE 50) Financing flows describe the sources of debt and equity financing and repayments of liabilities and equities. Answer: TRUE OR FALSE