Ch8 Quiz

The matching principle in regards to accrual accounting is A. Recognize revenues when they are paid B. Recognize revenues when they are earned C. Recognize the expenses incurred to generate earned revenues D. Recognize expenses paid to support revenues earned

C. Recognize the expenses incurred to generate earned revenues

Financing decisions in a budget are used to construct all of the following pro forma financial statement components EXCEPT: A. Debt B. Interest expense C. Shareholder s equity D. Inventory

D. Inventory

Examples of fixed assets include which of the following? I. Inventory II. Treasury bills III. Forklift IV. Goodwill A. III only B. I and III only C. I, II, and IV only D. I, III, and IV only

A. III only

"When it comes to Audit Opinions, firms would like " A. Unqualified B. Adverse C. Disclaimed D. Qualified with explanation

A. Unqualified

Which is NOT a source of cash for a company? A. Depreciation expense B. An increase in Accounts Receivables C. A decrease in Inventory D. Paying your bills later

B. An increase in Accounts Receivables