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seet to (answers circled in this 1. What is the effect on the financial on the financial statements when a company fails ted and stockholders' equity is understated C. Enare understated and stockholders' equity is understated depreciation expense at year-end? . Net income is overstated stockho .Expenses are understated and liabilities are overstaie income is overstated and assets are overstated statementst eable would be reported wihin which of the following financisal A. Statement of cash flows. B. Income statement Balance sheet. D. Statement of retained earnings. 3. In what orde r are current assets listed on a balance sheet? By dollar amount (largest first). B By date of acquisition (earliest first). C. By liquidity D. By relevance to the operation of the business. 4. Which of the following correctly describes retained earnings? A. It is the cumulative earnings of a company. B. It represents the investments by stockholders in a company. C. It equals total assets minus total liabilities. K D. It is the cumulative earnings of a company less dividends declared.