TRUE/FALSE

3) A company purchased machinery by issuing a long-term note payable. This is an example of a non-cash investing and financing activity for the statement of cash flows.

4) When preparing the statement of cash flows using the indirect method, depreciation expense is subtracted from net income under operating activities.

5) The investing activities section of the statement of cash flows reports cash receipts and payments that increase or decrease long-term liabilities.

6) When preparing the statement of cash flows using the indirect method, a loss on the sale of plant assets must be shown as a subtraction from the investing activities section.

7) Although the direct method is easier to use, the Financial Accounting Standards Board (FASB) prefers the indirect method of reporting cash flows from operating activities.

8) When preparing the statement of cash flows using the indirect method, a decrease in current liabilities is added to the net income to arrive at net cash flow from operating activities.

9) The cash paid to acquire equipment is reported in the investing activities section on the Statement of Cash Flows.