A is false - Official assets are included in financial account. B is false - Such cash flows belong to the financial account. However, income associated with investment is treated as part of the current account. III is a direct outflow of domestic currency and is treated as a debit entry on the current account.

The equally-weighted index would be clearly inappropriate for the S&P 500 fund or the DJIA fund. Likewise, it would be inappropriate for the large stock/bond fund since it is a stock index only. Since the 30-40 stock portfolio is equally-weighted, it should be compared with an equally-weighted index.

The liability method is to be used for tax consequences of temporary differences, as it is more useful for assessing future cash flows. It is based upon the values of the assets and liabilities, the future tax liability or benefit, and the future tax rates.

When an expense is not deductible for tax purposes, it is a permanent difference and therefore, there is no temporary difference at all. This amount is eliminated when calculating the accounting income subject to tax.

I). The two basic characteristics are: The liability is known to exist and the precise dollar amount cannot be determined until a later date.
II). When a liability is accrued (recognized before its due date), an offsetting expense (accrued expense) is recorded.
III). Unearned fees and customer deposits are unearned revenues, which are usually classified as current liabilities.
IV). Working capital (Current assets-Current liabilities) measures the uncommitted liquid assets. The quick ratio (The most liquid assets/Current liabilities) is a more stringent measurement of solvency.