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Principles of Finance

Review Questions

Principles of FinanceReview Questions

1 .
Joe runs a small barbershop. Most of his customers pay with cash. He has only a few monthly expenses including wages for one employee and utilities. Which method of accounting should Joe use?
2 .
Which method of accounting generally provides the most accurate information on organizational performance (income or loss)?
3 .
Under the accrual basis of accounting, when is an expense recorded?
4 .
Describe the basic elements of a T-account.
5 .
What is double-entry accounting?
6 .
What is the expense recognition principle?
7 .
Why is ethics an important concept pertaining to revenue and expense recognition principles?
8 .
What is the revenue recognition principle?
9 .
What is the difference between a tangible and an intangible fixed asset? List common examples of each.
10 .
How is the cost of a fixed asset recorded and recognized over time?
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