True or False

  1. Both the indirect and direct methods of calculating cash flows from operations begin with net income.
  2. Purchasing treasury stock is an example of a financing activity.
  3. Presenting the statement of cash flows is optional according to U.S. GAAP.
  4. Some analysts believe the cash flow from operating activities is a better measure of a company than its net income.
  5. A loss on the sale of equipment would be shown in the operating section because it is shown on the income statement.
  6. Investing and financing activities not involving cash still need to be disclosed.
  7. Accrual accounting causes differences to exist between the income statement and operating section of the statement of cash flows.
  8. Payment of interest and dividends are both operating activities.
  9. Most companies use the direct method of calculating cash flows from operating activities.
  10. Depreciation expense is never a cash expense.