Which statement is false?A.The balance sheet

5.Which statement is false?A.The balance sheet of an entity purports to show the true value of the entity.B.The balance sheet should show a company’s liquidity.C.The balance sheet reflects the financial capital of a company.D.The balance sheet summarizes the financial position of an entity at a point in time.6.To be recognized in the financial statements, an item must meet the definition of an element and beA.measurable, understandable, and relevantB.reliable, measurable, and realizedC.realized, relevant, and reliableD.relevant, measurable, and reliable7.The ability of a company to adapt its resources to create change and react to change is calledA.financial flexibilityB.liquidityC.operating capabilityD.resource structure8.Which of the following characteristics must an economic resource have in order to be classified as an asset?A.acquired as a result of a past transactionB.future service potentialC.under the control of the business entityD.all of theseE.none of these9.Which is not a characteristic of an asset?A.The resource must be useful only in the entity’s activities and have been acquired by purchase, production, orstockholder investment.B.The entity must be able to obtain the future benefit and control others’ access to it.C.The transaction or event giving rise to the entity’s right to or control over the benefit must have alreadyoccurred.D.The resource must singly, or in combination with other resources, have the capacity to contribute directly, orindirectly, to the entity’s future net cash inflows.10.Which statement is not true?A.To be a liability, the transaction or event obligating the entity must already have occurred.B.The net worth of an entity is equal to its assets.C.The specific identity of the “