Question
1. Retained earnings are part of the stockholders' equity in a corporation. a. True b. False 2. If a firm sells inventory at cost for
1. Retained earnings are part of the stockholders' equity in a corporation.
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2. If a firm sells inventory at cost for cash, its total assets rise.
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4. If a firm has retained earnings, it has an equal amount of cash.
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5. The sum of a firm's liabilities and equity equals the sum of its assets.
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6. Retained earnings represents the earnings accumulated by the firm over its life.
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7. Accounts receivable are adjusted for doubtful accounts (i.e., accounts that may not be paid).
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9. Issuing new stock or borrowing from a bank is a cash inflow.
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10. An increase in accounts payable is a cash outflow.
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11. If liabilities are decreased or assets increased, that generates a cash inflow.
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12. If a firm's current assets and current liabilities decline, the firm had a cash inflow.
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