Which of the basic financial statements is best used to answer the question, "How profitable is the business

Which of the basic financial statements is best used to answer the question, "How profitable is the business?"

A) Balance sheet

B) Statement of shareholder's equity

C) Income statement

D) Accounts receivable aging schedule

Who owns the retained earnings of a public firm?

A) The IRS

B) Common stockholders

C) Bondholders

D) Preferred stockholders

Which of the following represents an attempt to measure the earnings of the firm's operations over a given time period?

A) Balance sheet

B) Cash flow statement

C) Income statement

D) None of the above

Stock that is repurchased by the issuing company is called

A) paid in capital.

B) treasury stock.

C) retained capital.

D) par value stock.

Which of the basic financial statements is best used to answer the questions "What does the company own and how is it financed?"

A) Balance sheet

B) Statement of shareholder's equity

C) Income statement

D) Cash flow statement

In a growing business, negative cash flow from investing activities is normal.

Answer:  TRUE

Reducing a firm's debt will increase its cash flow.

Answer:  FALSE 

Beginning cash balance + cash flow from operations + cash flow from investing activities + cash flow from financing activities = ending cash balance.

Answer:  TRUE