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Problem 1: Which of the following statements about the balance sheet in a company's second period of operations is true?
a. The balance sheet begins with the ending balances of the previous period because it is the cumulative total of the entity's assets, liabilities, and stockholders' equity since the company's inception.
b. The balance sheet does not begin with the ending balances of the previous period because it is not the cumulative total of the entity's assets, liabilities, and stockholders' equity since the company's inception.
c. The balance sheet begins with the ending balances of the previous period because it is the cumulative total of the entity's expenses and incomes since the company's inception.
d. The balance sheet does not begin with the ending balances of the previous period because it is not the cumulative total of the entity's assets and expenses since the company's inception.
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