Woodstock Company uses the indirect method to prepare its statement of cash flows. Indicate whether each of the following statements is true or false.
_____ a) Depreciation expense would be subtracted from net income when determining the amount of cash flow from operating activities.
_____ b) Losses would be added to net income when determining the amount of cash flow from operating activities.
_____ c) Cash flow from investing activities would be reported the same as if the direct method were used.
_____ d) The amount of net cash flow from operations will be higher than it would be if the direct method were used.
_____ e) With the indirect method, a decrease in accounts receivable is added to net income in calculating the amount of cash flows from operating activities.

Question

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The Answer of Woodstock Company uses the indirect method to prepare its statement of cash flows. Indicate whether each of the following statements is true or false.
_____ a) Depreciation expense would be subtracted from net income when determining the amount of cash flow from operating activities.
_____ b) Losses would be added to net income when determining the amount of cash flow from operating activities.
_____ c) Cash flow from investing activities would be reported the same as if the direct method were used.
_____ d) The amount of net cash flow from operations will be higher than it would be if the direct method were used.
_____ e) With the indirect method, a decrease in accounts receivable is added to net income in calculating the amount of cash flows from operating activities.

Woodstock Company Uses the Indirect Method to Prepare Its Statement