True / False Indicate whether the statement is true or false. (lpt each) 1. Equity is defined as a residual claim such that assets plus liabilities equals equity a. True b. False 2. When a parent company owns a majority of the common shares of a subsidiary company but not 100% of them, the parent company will consolidate all of the subsidiary's revenues and expenses into its financial statements a. True b. False 3. All long-term investments are listed on the balance sheet at fair value a. True b. False 4. Asset measurement methods that reflect historical values include acquisition cost and residual value. a. True b. False 5. The information reported in the income statement can be used to predict a company's future income and cash flows. a. True b. False 6. FASB's definition of fair value of an asset is characterized as a measure of market-based exit value, which is the amount for which a company could sell the asset. a. True b. False 7. Distributions to owners increase equity and investments by owners decrease equity. a. True