QUESTION 32 Which of the following statements is CORRECT? O a. The focal point of the income statement is the cash account because that account cannot be manipulated by "accounting tricks." b. The income statement for a given year is designed to give us an idea of how much the firm earned during that year. c. The reported income of two otherwise identical firms must be identical if the firms are publicly owned, provided they follow procedures that are permitted by the Securities and Exchange Commission (SEC). d. The reported income of two otherwise identical firms cannot be manipulated by different accounting procedures provided the firms follow generally accepted accounting principles (GAAP). e. If a firm follows generally accepted accounting principles (GAAP), then its reported net income will be identical to its reported cash flow. QUESTION 33 Which of the following statements is CORRECT? a. Assets other than cash are expected to produce cash over time, and the amounts of cash they eventually produce should be exactly the same as the amounts at which the assets are carried on the books. b. The four most important financial statements provided in the annual report are the balance sheet, income statement, cash budget, and the statement of stockholders' equity. c. Prior to the Enron scandal in the early 2000s, companies would put verbal information in their annual reports along with the financial statements. That verbal information was often misleading, so today annual reports can contain only quantitative information--audited financial statements. d. The primary reason the annual report is important in finance is that it is used by at in finance is that it is used by investors when they form expectations about the firm's future earnings and dividends and the riskiness of those cash flows. e. The annual report is an internal document prepared by a firm's managers solely for the use of its creditors/lenders