QUESTION 1 Which of the following statements is false with regard to the income statement? The income statement presents revenues, expenses, net income and earnings per share for an accounting period. Two formats can be used when preparing an income statement: the multiple-step or the single-step format. The income statement documents the changes in the balance sheet equity accounts from one accounting period to the next The terms income, earnings and profit are used interchangeably. QUESTION 2 How is a common-size income statement created? Each item on the income statement is expressed as a percentage of total assets. Each item on the income statement is expressed as a percentage of cash flow. Each item on the income statement is expressed as a percentage of net income. Each item on the income statement is expressed as a percentage of net sales. QUESTION 3 From last year to this year a firm's sales have declined 15%. what is a possible reason to explain the decline? The firm increased the selling price and sold more units of product compared to last year. The firm increased the selling price of the product compared to last year. The firm decreased the selling price and sold fewer units of product compared to last year. The firm sold more units of product compared to last year