7. Which of the following statements is FALSE? A) The income statement is put together at a specific point in time (end of a business quarter, or business year) and so the sale could be in one period and the cash received in another period. B) The income statement contains the set of expenses associated with the products or services sold during the current operating period, with those expenses not associated with current cash flow labeled as non-cash expense items. C) Depreciation is a current expense of a cash outflow in the current period. D) Companies depreciate fixed assets (such as office furniture, equipment, machinery, and buildings) over an assigned time period, but the initial cash outlay for the fixed asset typically occurs at the time the asset is acquired by the firm. Answer: is simply the interest earned in subsequent periods on the interest earned in prior periods 8. A) Quoted interest B) Anticipated interest C) Simple interest D) Compound interest Answer 9. Capital structure is best defined by which of the following questions? A) How will we fund our product and service choices? B) What business are we in? C) How will we manage our day-to-day financial needs? D) What is our firm's best choice for corporate governance? Answer 10. Which of the statements below is TRUE? A) The ownership accounts or owners' equity section of the balance sheet reflects the owners' stake in the firm B) The ownership accounts or owners' equity section of the balance sheet is made up of common stock but not rell re e rtaine am retained earnings. equity, but not treasury stock. D) The Statement of Retained Earnings is used to show the distribution of the interest paid for the past period