True or false

$1.$ Retained earnings represent the amount of cash available for dividends.

$2.$ Net income of a corporation should be closed to retained earnings and net losses should be closed to paid$-$in capital accounts.

$3.$ Each bondholder may vote for the board of directors in proportion to the number of bonds held.

$4.$ A detailed stockholders' equity section in the balance sheet will list the names of individuals who are eligible to receive dividends.

$5.$ Bond interest paid by a corporation is an expense, whereas dividends paid are not an expense of the corporation.

$6.$ A corporation incurs income tax expense only if it pays dividends to stockholders.

$7.$ Callable bonds are bonds that can be converted into common stock at the bondholder$$s option.

$8.$ A debenture bond is an unsecured bond which is issued against the general credit of the borrower.

$9.$ Bonds are a form of interest$-$bearing notes payable.

$10.$ Any item that appears on the income statement would be considered as either a cash inflow or cash outflow from operating activities.

$11.$ Neither corporate bond interest nor dividends are deductible for tax purposes.

$12.$ Dividends may be declared and paid in cash or stock.

$13.$ Gains and losses are not recognized when convertible bonds are converted into common stock.

$14.$ Generally, convertible bonds do not pay interest.

$15.$ The contractual interest rate is always equal to the market interest rate on the date that bonds are issued.

$16.$ If $$150,000$ face value bonds are issued at $103,$ the proceeds received will be $$103,000.$

$17.$ Discount on bonds is an additional cost of borrowing and should be recorded as interest expense over the life of the bonds.

$18.$ If a corporation issued bonds at an amount less than face value, it indicates that the corporation has a weak credit rating.

$19.$ If bonds are issued at a discount, the issuing corporation will pay a principal amount less than the face amount of the bonds on the maturity date.

$20.$ If bonds are issued at a premium, the carrying value of the bonds will be greater than the face value of the bonds for all periods prior to the bond maturity date.

$21.$ A retained earnings statement shows the same information as a corporation income statement.

$22.$ If the market interest rate is greater than the contractual interest rate, bonds will sell at a discount.

$23.$ Debt investments are investments in government and corporation bonds.

$24.$ A major difference among corporations, proprietorships, and partnerships is that a corporation's income statement reports income tax expense.

$25.$ A corporation incurs income tax expense only if it pays dividends to stockholders.

$26.$ The statement of cash flows is a required statement that must be prepared along with an income statement, balance sheet, and retained earnings statement.

$27.$ In accounting for stock investments of less than $20\%,$ the equity method is used.

$28.$ Dividends received on stock investments of less than $20\%$ should be credited to the Stock Investments account.

$29.$ If an investor owns between $20\%$ and $50\%$ of an investee's common stock, it is presumed that the investor has significant influence on the investee.

$30.$ For external reporting, a company must prepare either an income statement or a statement of cash flows, but not both.

$31.$ A primary objective of the statement of cash flows is to show the income or loss on investing and financing transactions.

$32.$ A statement of cash flows indicates the sources and uses of cash during a period.

$33.$ A statement of cash flows should help investors and creditors assess the entity$$s ability to generate future income.

$34.$ The information in a statement of cash flows helps investors and creditors assess the company$$s ability to pay dividends and meet obligations.

$35.$ Noncash investing and financing activities must be reported in the body of a statement of cash flows.

$36.$ The statement of cash flows classifies cash receipts and payments as operating, nonoperating, financial, and extraordinary activities.

$37.$ The sale of land for cash would be classified as a cash inflow from an investing activity.

$38.$ Cash provided by operations is generally equal to operating income.

$39.$ Using the indirect method, an increase in accounts payable during a period is deducted from net income in calculating cash provided by operations.

$40.$ A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method.