6 TRUE/FALSE 1 Cash, as the term is used for the statement of cash flows, could indicate either cash or cash equivalents. 2. The statement of cash flows shows the effects on cash of a company's operating, investing, and financing activities. 3. The statement of cash flows reports a fimm's major sources of cash receipts and major uses of cash payments for a period. 4 Cash flows from operating activities, as part of the statement of cash flows, include cash transactions that enter into the determination of net income. S. To arrive at cash flows from operations, it is necessary to convert the income statement from an accrual basis to the cash basis of accounting, Cash flows from investing activities, as part of the statement of cash flows, include receipts from the sale of land. 7. Cash flows from financing activities, as part of the statement of cash flows, include payments for dividends. Cash flows from investing activities, as part of the statement of cash flows, include payments for the purchase of treasury stock. 9 Cash flows from investing activities, as part of the statement of cash flows, include receipts from the issuance of bonds payable 10. Cash outflows from financing activities include the payment of cash dividends, the acquisition of treasury stock, and the repayment of amounts borrowed. Amounts held in cash equivalent investments must be reported separately from amounts held as cash in the statement of cash flows. 12 The purchase of treasury stock is an investing cash outflow. 13 Interest payments on debt are classified as cash outflows from financing activities 14. The manner of reporting cash flows from investing and financing activities will be different under the direct method as compared to the indirect method 8 15 There is no difference in the Investing and Financing sections of the statement of cash flows using the indirect and direct method