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Problem 1: What is accrual basis accounting?
A. Recording the amount of revenues and the amount of expenses when earned or incurred.
B. Recording the amount of revenues and the amount of expenses when cash is received or paid.
C. Recording the amount of revenues and the amount of expenses when budgets are adopted.
D. Recording the amount of revenues and the amount of expenses when audited and approved.
Problem 2: How should an expense that has been paid in cash be reported if it can be directly matched with an associated revenue?
A. By reporting it in the income statement as an expense.
B. By reporting it in the balance sheet as a revenue.
C. By reporting it in the balance sheet as an asset.
D. By reporting it in the income statement as an asset.
Financial Statement Analysis and Preparation
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T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .
Computation of Free Cash Flow
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