Indicate whether the following sentences are true or false, and explain why.

(a) Noncash expenses such as depreciation are subtracted from net income when using the indirect method for computing cash flows from operating activities.

(b) Cash equivalents are highly liquid investments with maturities at the date of purchase of less than three months.

(c) The acquisition of land by issuing bonds payable would not appear on the statement of cash flows.

(d) Cash paid for interest would be classified as a financing cash flow.

(e) A decrease in prepaid insurance would be subtracted from net income when determining cash flows from operating activities under the indirect method.

(f) The payment of a cash dividend increases the quality of income ratio.

(g) The quality of income ratio increases when depreciation expense is recorded.

(h) The quality of income ratio decreases when cash is used to pay accounts payable.