Study Guide and Quiz Answers

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21
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If your company uses accrual basis accounting, what do you need to pay special attention to?

A
Money the company owes
B
Money that is owed to the company
C
Cash flow
D
Revenue
22
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Which of the following statements describes GAAP?

A
GAAP standards are written and regulated by the government.
B
It is legally required that all companies meet GAAP standards.
C
Companies that meet GAAP standards usually use cash basis accounting.
D
GAAP recommends accrual basis accounting.
23

Which of the following is a type of liability?

A
A revenue stream
B
A liquid asset
C
Accounts payable
D
Accounts receivable
24

If your company uses accrual basis accounting, what do you need to pay special attention to?

A
Money the company owes
B
Money that is owed to the company
C
Cash flow
D
Revenue
25

Money that your company has in the bank in case of unexpected financial needs or in case sales slow down is called ____________.

A
An asset fund
B
A cash reserve
C
Equity
D
Insurance
26

The costs of running a business are called ___________.

A
Startup costs
B
Cash flow
C
Operating expenses
D
Fixed costs
27

In the accounting equation, assets are equal to which two things?

A
Debits + equity
B
Debits + accounts
C
Liabilities + equity
D
Liabilities + accounts

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