No explanations needed, just answer T or F.

Questions 1-15 are True or False Questions

1. A firm's total assets is the sum of its total liabilities and total shareholder's equity
2. Evidence shows that managers may engage in aggressive accounting in order to avoid missing earnings or revenue targets that have been set by Wall Street's expectations.
3. Revenues are recognized to the income statement when cash is transferred from the buyer to the seller.
4. A firm's earnings in a given period is the sum of its accounting accruals and cash flows.
5. Preferred stock usually has preferential rights over other classes of stock relative to dividends and liquidating distributions.
6. Write-offs to inventory when market prices drop below acquisition costs are temporary. When market prices improve, the prior losses will be reversed and appear as gains on the income statement.
7. Stock dividends cause a reduction in retained earnings, but they never reduce total shareholders' equity.
8. Plant, property and equipment investments are long-term revenue producing investments which should be expensed immediately on the purchase date.
9. Firms that use straight line depreciation for GAAP reporting, and MACRS depreciation for tax reporting will have a higher tax burden to the IRS (relative to GAAP income) towards the end of the asset's useful life.
10. Firms that choose to forgo the option to pass gains and losses from pension assumptions through OCI will usually generate more volatility in reporting net income than those that elect to defer these items to OCI.
11. Two similarities between preferred stock and bonds is that both have senior claims to common stock holders, and that both instruments have specific maturity dates.
12. If a company's capital structure includes convertible preferred stock, diluted EPS might be reduced even if the preferred stocks are not actually converted during the year.
13. Noncontrolling interest is equity owned by minority shareholders and is deducted to arrive at total stockholders' equity.
14. Expenses currently deducted in the IRS tax return but not included with expenses in the GAAP income statement until subsequent years create deferred tax assets.
15. The main issue in deciding whether to record a valuation allowance for a deferred tax asset is if there is enough taxable income in prior periods to receive the benefit of the NOL.