TRUE OR FALSE

1. The statement of cash flows is a critical financial report used to assess a company's financial status and its current cash position.
2. Net Book Value = Cost - Accumulated Depreciation
3. Depreciation expense should be included in cash paid for goods and services.
4. When comparing the direct and indirect methods to preparing the statement of cash flow; the only difference is the operating section. The investing and financing sections are prepared in the same manner.
5. An asset with a net book value of $6,800 was sold. A loss of $1,200 was realized on the sale of the asset. Proceeds from this sale were $5,200.
6. Equipment of $400,000 was purchased with the issuance of common shares. Since cash is not included in the transaction, it should not be included on the statement of cash flow but disclosed in a note.
7. Cash paid to employees would include salaries and wages expense and any changes to salaries and wages payable.
8. Non-cash transactions are excluded from the statement of cash flows but must be disclosed as a supplemental disclosure.