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99 both the indirect and direct method of preparing a statement of cash flows begin 4301656

 

99. Both the indirect and direct method of preparing a statement of cash flows begin with ent income. 
 

100. An increase to retained earnings from cash dividends indicate a cash outflow occurred to pay a dividend. 
 

101. Under the indirect method losses are added and gains are subtracted when computing net cash flow from operating activities. 
 

102. Under the direct method, depreciation expense is added back to net income when computing net cash flow from operating activities. 
 

103. The direct method shows the specific sources and uses of cash that are associated with operating activities. 
 

104. The investing section of the statement of cash flows is the same regardless of whether the direct or indirect method is used. 
 

105. In preparing the statement of cash flows by the indirect method, a decrease in prepaid expenses would be deducted from net income. 
 

106. In preparing the statement of cash flows by the indirect method, an increase in inventory would be deducted from net income. 
 

107. In preparing the statement of cash flows by the indirect method, an increase in accounts payable would be added to net income. 
 

108. In preparing the statement of cash flows by the indirect method, a change in a long-term investment account would be added to net income. 
 

 

 

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