Financial Accounting Final

T or F: If the assets of a company are $4,000,000 and its total liabilities equal $1,500,000, then total common stock equals $2,500,000.
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T or F: If the assets of a company are $4,000,000 and its total liabilities equal $1,500,000, then total common stock equals $2,500,000.
False, A = L + SE (SE = CS + RE). The only time this could be true is if RE were $0.
T or F: The resources (assets) that the company owns are reported on the balance sheet.
True
T or F: The accounting period can be one month, three months, six months, one year or any time frame specified by management.
True
T or F: Generally Accepted Accounting Principles (GAAP) are measurement rules used to develop information provided in the financial statements.
True
T or F: The audit report is a report that describes the auditors' opinion of the fairness of the financial statement presentations and the evidence gathered to support that opinion.
True
T or F: The report of management indicates that the auditor has the primary responsibility for providing the financial statement information.
False, management has primary responsibility.
T or F: A balance sheet is used to report the activities involving assets, liabilities, and stockholders' equity over a specific time period.
False, the balance sheet reports the financial position "at" a specific date
T or F: The income statement is used to report the results of operations over a specific time period.
True
T or F: The statement of stockholders' equity is used to report the changes in common stock and retained earnings attributed to issuance of additional stock, net income (or net loss) and dividends.
True
T or F: An entity's assets (economic resources) come from three primary sources: creditors, investors, and profits retained in the business.
True