Chapter 28 - Money Management

What accounting method is recommended for firms to use?

• Accrual Accounting Method

• Cash Accounting Method

A trial balance is if all the accounts balance with the debit or credits sides totaled separately.

• True

• False

What are the expenses in an income statement?

• The inflows of moneys to a company from the sale of goods and services

• The outflows of assets used to generate revenue and operate business

What are the two sides of a balance sheet?

• Assets and Liabilities

• Current Assets and Fixed Assets

• Liabilities and Equity

• Assets and Equity

Assets are what a firm owes.

• True

• False

Current liabilities are liabilities that are due in _____.

• 1-2 years

• 1 year or less

• 3 years or less

• 5 years or less

A formal statement of cash flows will detail the changes in cash available from _____.

• Operations

• Investments

• Financial Activities

• All of the Above

Fixed costs are often thought of as overhead items.

• True

• False

When the dollars to operate the business are exactly equal to the dollars generated from revenues of all sales activity you have reached the ______.

• Liquidity Ratio

• Break-Even Point

• Favorable Variance

• Fixed Cost

Cash flow is not the same thing as profit.

• True

• False