Explain “ACCRUAL BASIS” and “CASH BASIS” briefly with your own word by giving specific examples. If a company prepares an I/S according to these two approaches do these statements end up with same amount of profit/loss?
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Explain “ACCRUAL BASIS” and “CASH BASIS” briefly with your own
word by giving specific examples. If a company prepares an I/S according to these
two approaches do these statements end up with same amount of
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- Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.If a company shows a profit on its Income Statement, how will this affect (a) the Balance Sheet and (b) Cash Flow?Which of the following best describes the information reported in the income statement? Multiple Choice The current resources available to pay current obligations. The portion of profits paid in cash to stockholders. The extent to which cash inflows exceed cash outflows. The amount recognized from providing goods and services to customers compared to the cost of doing so.
- ductory financial accounting_ Liquidity is simply: O a. another term for non-current assets O b. a company's ability to pay obligations when due O c. another term for current liabilities O d. another term for cash ype here to searchDistinguish between cash-basis accounting and accrualbasisaccounting. Why is accrual-basis accounting acceptablefor most businesses and the cash-basis unacceptable inthe preparation of an income statement and a balance sheet?describe the roles of the key fi nancial statements (statement of fi nancial position, statementof comprehensive income, statement of changes in equity, and statement of cash fl ows) inevaluating a company’s performance and fi nancial position
- The profitability of the business will be shown in which of the following print-outs? Question 46 options: Profitablity report Statement of cash flow Income statement Statement of retained earningsexplain how Value drivers are related to financial statement analysis and explain their behavior over time. Can a company reply on net income as a valid measure of cash needed to pay fixed charges? Explain you answer Explain why companies do not include principle payment requirement when calculating earnings to fixed charges ratio.Match the words to the definitions. Solvency Accounts Receivable Balance Sheet Noncurrent Assets Income Statement Retained Earnings Noncurrent Liabilities. Liquidity Current Assets Cash Flow Statement ✓ [Choose ] A forecast of the amount and timing of future cash inflows and outflows over some period of time. A summary of the revenues and expenses of a business over a given period of time. When net worth is greater than zero, or assets are greater than liabilities on the balance sheet. The ability to meet the day-to-day cash needs of the firm. Profits that are not paid out in dividends but are reinvested in the firm itself. Summarizes a firm's financial position at a given point in time and lists the firm's assets, liabilities, and net worth. Debts that others owe the business, usually arising from previous credit sales. Something the firms owns or uses that will not turn into cash within the next accounting period. Either cash or an items that will become cash in the next accounting…
- Which of the following choices accurately reflects how the recording of accrued salary expense affects the financial statements of a business? A. B. C. D. Assets = Liabilities + + + Balance Sheet Multiple Choice Option D Option B Option A Option C + + Stockholders' Equity +/- Income Statement Revenue Expense + + + Net = income Statement of Cash Flows -Operating ActivityExamine the business activity and decide for its classification from the choices below. Also, indicate if it is an inflow (-) or outflow (+). Activity: Pay employee salaries Choices: (O) Cash flow from operating activity (I) Cash flow from investing activity (F) Cash flow from financing activity (NC) Non-cash investing/financing activityd. Using the financial statements prepared in part a, briefly evaluate the company's profitability and liquidity. what is the answer of d?