Final answer:
The statement that net income would be shown as a credit to Retained Earnings and be listed at the top of the operating activities section of the statement of cash flows when using the indirect method is False.
Step-by-step explanation:
In the indirect method of preparing the statement of cash flows, net income is indeed used as the starting point in the operating activities section. However, it is not credited to Retained Earnings in this statement. Instead, net income is adjusted for non-cash transactions and changes in working capital to calculate the net cash provided by operating activities.
Meanwhile, the retained earnings account is adjusted on the balance sheet, reflecting profits that have been kept in the company rather than distributed to shareholders as dividends. Credits to Retained Earnings are typically reflected in the statement of stockholder's equity.