1. A expresses each item on the balance sheet as a percentage of total assets. 2. The Assumption is the assumed unit of measurement when preparing financial statements. 3. As part of an integrated disclosure system required by the SEC, the information presented in annual reports includes three-year audited balance sheets. True/ False 4. The SEC regulates U.S. companies that issue securities to the public and requires the issuance of a prospectus for any new security offering. True/ False 5. arises when one company acquires another company for a price in excess of the fair market value of the net identifiable assets. 6. Retained earnings is the unused stash of cash that a firm has accumulated since inception. True/ False