True and False

1. Liabilities are the tangible or intangible things that a firm owns.

2. The income statement tells us the total revenues and expenses for the time period and also contains several different measures of the accounting profits earned by the firm.

3. Owners equity represents the difference between the value of the current assets and current liabilities of the firm.

4. Current assets are a part of the liabilities that are expected to be retired in one year or less.

5. Net income does not accurately represent the funds that a firm has available to spend because the calculation of net income deducts depreciation expense which is a non-cash item.

6. The statement of cash flows outlines the sources of the firms cash inflows and shows where the cash outflows went.

7. Cash flow is the number one concern for financial analysts.