Can you answer it as true/false

1 Income statement is like a moving picture; in contrast a balance sheet is like snapshot.

2 Retained Earnings increase by net income and decrease by dividend payments.

3 Total comprehensive income comprises of profit or loss and other comprehensive income

4 Change in revaluation surplus is a component of other comprehensive income.

5 If a company operates at a profit for the year, its cash flow from operations is positive.

6 The difference between the direct and indirect method for preparation of the statement of cash flows is seen only in the operating activities section. 7 Cash payments to suppliers for goods and services are examples for cash flows from investing activities

8 The balance sheet may be out of balance after some transactions, but it is never be out of balance at the end of accounting period.

9 Treasury stock is an asset.

10 Gains or losses are not possible from a corporation acquiring or selling its own stock.

11 Accumulated depreciation is the total depreciation expense for the year.

12 When a company buys inventory for cash total assets do not change. However, when it buys inventory on open account, total assets increase.

13 Cash dividends are expenses.

14 Effective interest method is used to measure the value of held-to-maturity securities over the time.

15 At acquisition, all financial assets are recorded at cost

16 Unlike in the other methods of depreciation, in Double-Declining Balance method the salvage value is not deducted to determine depreciable amount.

17 Inventory turnover ratio is a measure of solvency.

18 Successful use of leverage is evidenced by a rate of return investment greater than cost of debt.

19 Trading on the equity means exchanging bonds for stock.

20 Financial statements report on history. Therefore, they are not useful to creditors and investors who want to predict future returns and risk.