Which statement is incorrect about cashflow?

a. Positive cash flow indicates that a company's liquid assets are decreasing.

b. Using the cash flow statement in conjunction with other financial statements can help analysts and investors arrive at various metrics and ratios used to make informed decisions and recommendations.

c. The cash flow statement can be used to understand the trends of a company's performance.

d. The cash flow statement differs from the other financial statements because it acts as a corporate checkbook that reconciles the other two statements.

Which statement is incorrect about depreciation?

A. Depreciation is an accounting term that essentially depreciates intangible assets such as intellectual property or loan interest over time.

B. Depreciating assets helps companies earn revenue from an asset while expensing a portion of its cost each year the asset is in use.

C. Depreciation represents how much of an asset's value has been used up.

D. Depreciation is an accounting convention that allows a company to write off an asset's value over a period of time, commonly the asset's useful life.

Which statement is incorrect about balance sheet?

A. The balance sheet is an essential tool used only by analysts to understand the current financial health of a business.

B. The balance sheet adheres to the accounting equation, where assets on one side, and liabilities plus shareholders' equity on the other, balance out

C. The balance sheet can help users answer questions such as whether the company has a positive net worth, whether it has enough cash and short-term assets to cover its obligations, and whether the company is highly indebted relative to its peers.

D. It is a financial statement that provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders.

Which statement is incorrect about income statement?

A. The income statement is one of three financial statements that stock investors rely on.

B. Investors must keep in mind that the income statement recognizes revenues when they are even unrealized.

C. The income statement summarizes a company's revenues and expenses over a period, either quarterly or annually.

D. By understanding the income and expense components of the statement, an investor can appreciate what makes a company profitable.

Which statement is incorrect about break-even analysis?

A. The break-even point is considered a measure of the margin of safety.

B. Break-even analysis can prove a company with higher fixed costs will have a lower break-even point of sale.

C. Break-even analysis tells you how many units of a product must be sold to cover the fixed and variable costs of production.

D. Break-even analysis is useful in determining the level of production or a targeted desired sales mix.