Question 1

(a) An income statement details how much cash a company earned during a specific period. TRUE OR FALSE?

(b) Depreciation reduces the cash on a firms balance sheet.TRUE OR FALSE ?

(c) We can create a cash flow statement by reversing out non-cash flow items on the income statement. TRUE OR FALSE ?

(d) Is a firms net income usually the best way to measure a managers performance ? If so, why? And if not what might be a better method?

(f) IF a firm has $2 million in total assets, $1.5 million in total liabilities, 0 preferred stock outstanding, and retained earnings of $100,000, what is the common stock on balance sheet.