TRUE or FALSE 8. Non-cash assets in the statement of financial position are measured at the amounts that they are expected to be realized in the event of liquidation.

9. The amount of earnings per share is computed by dividing the net income by the number of shares outstanding at the end of the period.

10. Income tax expense is classified as a general and administrative expense, because it is a cost of doing business with the government.

11. In the statement of cash flows using the indirect method, depreciation is added to net income to arrive at a cash flow from operations because depreciation reduces net income but does not require a cash outflow.

12. Events after the reporting period are those that take place after the balance sheet date up to the date of the next balance sheet date.

13. An event after the reporting period shall be disclosed in the Notes to the Financial Statements if it relates to a condition different from the condition as of the reporting date, and is significant or material enough to affect the evaluation of a financial statement user.

14. The discovery of fraud or error which shows that the financial statements are incorrect may be rectified by mere disclosure in the notes to the financial statements of the effects of the error and the proper treatment for its correction.