TRUE FALSE. Write T' if the statement is true and F if the statement is false. 1) A corporation is a legal entity separate from its owners. 2) Retained earnings generally consist of a company's cumulative net income less any net losses and dividends declared since its inception. 3) The primary purpose of the statement of cash flows is to report all major cash receipts (inflows) and cash payments (outflows) during a period. 4) To be classified as a cash equivalent, the only criterion an item must meet is that it must be readily convertible to a known amount of cash. 5) The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents. 6) Financial statement analysis applies analytical tools to financial statements and related data for making business decisions. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 7) The costs of bringing a corporation into existence, including legal fees, promoter fees, and amounts paid to obtain a charter are called: A) Selling expenses. B) Prepaid fees. C) Minimum legal capital. D) Organization expenses. E) Stock subscriptions. 8) The number of shares that a corporation's charter allows it to sell is referred to as: A) Preferred stock. B) Outstanding stock. C) Common stock. D) Issued stock. E) Authorized stock