12 Questions
What method of accounting is universally used in business today?
Accrual accounting
Where are transactions recorded as they happen in a business?
Accounting journals and ledgers
What does the income statement summarize?
Incomes and expenses for a period of time
Which financial statement shows how much cash came in and where it came from?
Cash flow statement
Which accounting method recognizes transactions only when cash is exchanged?
Cash accounting
What is the process through which the financial situation is recorded in accounting?
Bookkeeping
What is the main difference between operating, investing, and financing cash flows?
The nature of the activities generating the cash flows
What is the accounting equation that must always hold true?
Assets = Liabilities + Equity
What is the cash flow available to make investment decisions after operations and debt repayments are taken care of?
Free cash flow
What represents a snapshot of assets, debts, and equity at a specific point in time?
Balance sheet
What do assets, liabilities, and equity represent in the accounting equation?
Current financial standing
Which financing option is considered when the accounting equation is in balance?
Taking on more debt
Explore the fundamental concepts of accounting such as accrual accounting and cash accounting. Learn about the importance of financial statements in measuring the financial health of a business. Dive into the accounting process and how transactions are recorded.
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