Reference no: EM132864595

Problem 1: The accrual assumption would require recognition of revenue

Select one:

a. Only when the revenue is earned

b. Only when the money has been received

c. Only when the money has been received in part with a promise to pay amounts owing by a given period

d. Only when the revenue arises from the sale of goods or services on credit

Problem 2: Provision for doubtful debts is included in the balance sheet

Select one:

a. In order to recognise a conservative estimate of debtors

b. In order to decrease the value of inventory

c. In order to recognise the book value of inventory

d. In order to increase the value of debtors

Problem 3: Leverage measures the extent to which

Select one:

a. A firm funds its assets with borrowings

b. The firm is exposed to risk

c. A firm uses liabilities in its capital structure

d. All of these answers are correct

Problem 4: Management may use the statement of cash flows to

Select one:

a. Determine efficiency of management in generating revenue

b. Determine the profitability over the period

c. Assess the liquidity of the business

d. All of the above