True and False Question:

1.Cookie-jar reserves do not result in inflow of cash ()

2.The huge gap between Sunbeam's reported operating income and cash flow from Financing was a strong signal of fraudulent reporting.()

3.When a reserve is created, the expense is recognized in the current period. When the loss occurs in future, the amount is offset against the reserve. ()

4.Dunlap's restructuring plan for Sunbeam was to slash costs by closing production plants, dropping product lines, and slashing workers' jobs. ()

5.When examining financial statements, one must be concerned when the reported operating income is not being earned in cash( )