Question Details

Using the direct method, major classes of investing and financing activities 



True or false:
1.	During the year, Income Tax Expense amounted to $30,000 and Income Taxes Payable increased by $4,000; therefore, the cash paid for income taxes was $26,000.

2.	In preparing net cash flow from operating activities using the direct method, each item in the income statement is adjusted from the accrual basis to the cash basis.

	3.	Using the direct method, major classes of investing and financing activities are listed in the operating activities section.

	4.	During a period, cost of goods sold + an increase in inventory + an increase in accounts payable = cash paid to suppliers.

	5.	The use of a worksheet to prepare a statement of cash flows is optional.




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