2. A complete package of financial state- ments includes five pieces. Name the five. 1. 2. 3. 4. 5. 3. An income statement provides a net income by listing revenues and sub- tracting expenses. 4. Balance sheets, generally, are more useful when they show two years for purposes of comparison 5. Financial statements can be ex- pressed in percentages, as well as financial numbers. These types of re- ports are called: a. common size b. pro forma c. flexible budget 6. The purpose of a retained earn- ings statement is to display changes to retained earnings during a specified period of time. 7. Ratios are of little use to managers because they are rarely relevant to how the business is doing. 8. Although cash flow statements can also be used for analysis, their basic purpose is to provide a list of sources and uses of cash. 9. List the two components necessary in assuring that a company's financial statement is true and correct: 1. 2