Indicate whether the following statements are "True" or "False" by circling your answers on the answer sheet:

True False

T F Dividends declared reduce a company's retained earnings but are not deducted as an expense in arriving at net income for a period.

T F If the net income reported by a company during a year is overstated, then its reported value of net assets at the end of the year is also overstated $($assuming the beginning balances of all accounts were correctly stated$).$

T Assuming an adequate 'allowance for doubtful accounts', the writing off an uncollectible account has no direct effect on the reported value of total assets.

T F The valuation of nonmonetary assets $($e$.$g$.,$ inventory, fixed assets$)$ is based on their market values.

T F A deferred tax liability reported on a firm's balance sheet represents the amount of money the company owes for income taxes currently payable.

T F Cash flows from operating activities summarize the cash effects of revenue and expense transactions appearing on the income statement.

$T$ F Under the indirect method, depreciation, and losses on the sale of fixed assets are deducted from net income $($i$.$e$.,$ negative adjustments to net income$)$ in arriving at the net cash provided by operating activities.

$T$ F The net book value of a fixed asset declines more rapidly in the early years of its life under accelerated depreciation methods than under the straight$-$line method.

T F Interperiod tax allocation is required for temporary differences between pretax accounting income $($i$.$e$.,$ income before taxes$)$ and taxable income, but not for permanent differences.

T F Ordinary and necessary repairs to a machine that do not change any of the machine's basic attributes $($i$.$e$.,$ features$)$ should be expensed rather than capitalized.