QUESTION 1 A decrease inventory over the period, will be deducted from net income in determining cash provided or used from operating activities O True False QUESTION 2 A decrease in accounts receivable over a period, will be added back to net income in determining cash provided or used from operating activities False True QUESTION 3 The basis of classifying assets as current or non-current is conversion to cash within the operating cycle or one year whichever is shortor True False Save All Answers QUESTION 4 If current assets equal $500, and current liabilities equal $100, it can be said that working capital is five-hundred percent or the number five True False QUESTION 5 The statement of financial position is useful for analyzing solvency True False QUESTIONS Depreciation expense is a non-cash expense that must be added back to net income when preparing a statement of cash flows, following the indirect method True False 1 p. QUESTION 7 A gain on the sale of equipment is reported as a cash inflow in the investing activity section of the statement of cash flows. True False