Book value is equal to the initial cost minus depreciation

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Reference no: EM131820196

1. An expense that lowers net income but does not affect a firm's cash flow is referred to as a noncash item. (T/F)

2. Book value is equal to the initial cost minus the depreciation to date. (T/F)

3. All else equal, a decrease in net working capital will increase owners' equity. (T/F)

4. A decrease in net working capital for the period is a cash inflow for the firm. (T/F)

5. Operating cash flow is equal to: Cash flow from assets + Net capital spending + Change in net working capital. (T/F)

6. The matching principle advocates recording costs when the liability for those costs occurs. (T/F)

7. When net new borrowings are subtracted from the interest payments a firm pays to its creditors the result is called the cash flow to creditors. (T/F)

Reference no: EM131820196

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