1. The annual report contains four basic financial statements: the income statement, balance sheet, statement of cash flows, and statement of stockholders' equity. True or False

2.Which of the following statements is CORRECT?

	A.	The difference between the total assets reported on the balance sheet and the debts reported on this statement tells us the current market value of the stockholders' equity, assuming the statements are prepared in accordance with generally accepted accounting principles (GAAP).
	B.	A typical industrial company's balance sheet lists the firm's assets that will be converted to cash first, and then goes on down to list the firm's longest lived assets last.
	C.	The balance sheet for a given year is designed to give us an idea of what happened to the firm during that year.
	D.	The balance sheet for a given year tells us how much money the company earned during that year.

3.

Other things held constant, which of the following actions would increase the amount of cash on a company's balance sheet?

	A.	The company repurchases common stock.
	B.	The company pays a dividend.
	C.	The company issues new common stock.
	D.	The company purchases a new piece of equipment

4. The primary reason the annual report is important in finance is that it is used by investors when they form expectations about the firm's future earnings and dividends, and the riskiness of those cash flows. True or False