5) When reporting the statement of cash flows, the amount paid for interest and taxes is reported within the operating section of the statement or in the related footnotes. A) True B) False Select one: A B 6) When preparing the statement of cash flows, using the indirect or direct method, a reconciliation of net income to net cash flows from operating activities is required. A) True B) False Select one: A 7) For the current year ending December 31, 2020, the following errors were discovered in California Company's financial statements: Ending inventory was understated by $12,500 Depreciation expense was overstated by $1,600 If uncorrected, what effect will these errors have on net income before taxes for the year ending December 31, 2020? A) Overstated by $14,100. B) Understated by $14,100. C) Understated by $10,900. D) Overstated by $10,900. Select one: A 0 B D 8) For the year ended December 31, 2020, California Corporation made an error causing depreciation to be under reported by $76 million. The applicable tax rate is 35%. California's retained earnings as of December 31, 2020, would be: A) Overstated by $76.00 million. C) Understated by $76.00 million. B) Understated by $49.40 million. D) Overstated by $49.40 million. Select one: A B D