answer each true or false questions

1. If total current assets are $140,000 at the end of Year 1, increase by $50,000 by the end of Year 2, and increase by $50,000 in Year 3, the percentage increase over the preceding year is less in Year 3 than in Year 2. 2. If capital stock is issued by a corporation at a price lower than par value, the difference represents a loss in the period in which the shares of stock are issued. 3. Diluted earnings per share represents a hypothetical case, showing what earnings per share would be if certain securities were converted into additional shares of common stock. 4. Depreciation expense reduces net income but does not reduce the net cash flow from operating activities. 5. A company whose future earnings are expected to rise substantially is likely to have a higher price-earnings ratio than a company whose future earnings are expected to decline. 6. If the return on total assets ratio is substantially below the cost of borrowing, common stockholders will benefit from a high debt ratio. 7. Companies that show profits on the income statement will always show positive cash flows from operating activities. 8. The amount transferred out of retained earnings when a 4% stock dividend is declared is equal to the prevailing market value per share times the number of dividend shares to be distributed. 9. Comprehensive income may be presented in a statement with net income, in a separate statement, or as part of the notes to the financial statements. 10. The sale of treasury stock at a price in excess of its cost results in a realized gain which should be presented as a non-operating item in the income statement