True or False
1. A basic understanding of financial statements is needed due to ongoing financial turmoil and major corporate failures.
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2. A corporate annual report contains three basic financial statements.
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3. Management is responsible for the preparation of the financial statements, including the notes, and the auditor’s report attests to the fairness of the presentation.
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4. Despite the enactment of the Sarbanes-Oxley Act of 2002, corruption and unethical behavior continued in the 2000s.
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5. Publicity in the media can impact a firm’s financial performance.
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6. The balance sheet shows the financial position of a company on a particular date.
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7. The terms income, earnings, and profit are used interchangeably.
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8. The statement of cash flows shows the changes in the income statement accounts between periods.
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9. The statement of cash flows is helpful in determining the capacity of a firm to meet obligations for cash.
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10. Tools and techniques used to evaluate a firm's financial condition should include common size financial statements, financial ratios, trend and structural analysis and industry comparisons.