Question $1$

Which of the following statements is incorrect?

The common$-$size balance sheet displays all entries as a percentage of the firm's total assets.

All the answers are correct except one.

Retained earnings is the accumulation of the undistributed profits of the firm.

The balance sheet tells us the total revenues and expenses for the time period and also

contains several different measures of the accounting profits earned by the firm.

When a firm's accounts payable balance increases and, because it is a liability, that represents

a source of funds on the statement of cash flows.