7) A stock dividend and a cash dividend are similar in that they both reduce total stockholders equity. However, a stock dividend does not affect the statement of cash flows whereas a cash dividend does affect the statement of cash flows. (True/False)

8) When preparing a statement of cash flows (indirect method), an increase in inventory would result in a deduction from net income. (True/False)

9) When using the indirect method to prepare the operating section of a statement of cash flows, a gain on the sale of land and an increase in notes receivable would both be added back as an adjustment to net income. (True/False)

10) A statement of cash flows would not disclose the purchase of machinery in exchange for a note payable. (True/False)

11) Under the indirect method, tax expense incurred but unpaid will not affect the statement of cash flows. (True/False)