1. What is accrual basis of accounting method? Why the accrual basis of accounting method is considered better than cash basis accounting method? 2.

1. What is accrual basis of accounting method? Why the accrual basis of

accounting method is considered better than cash basis accounting method?

2. How do you calculate Net Profit (Loss)?

3. When accounts payable occur?

4. A business had payments to suppliers of $453, employees $121. Customer

receipts $654, interest paid $10. Calculate net fund of the business from

operating activities.

5. A business had net cash flows from operating activities of $64, from

investment activities of -$42 and from financing activities of -$20. Calculate

the net cash position of the business.

6. A business had $5 in the bank, accounts receivable of $6, accounts payable

of $3, inventory of $4 and accrued expenses of $1. Calculate the current ratio

for the business.

7. Write down the equation for Cost of Goods Sold.

8. You have beginning inventory of $40,000, Ending inventory of $20,000 and

Cost of (Goods) sold of $100,000. How much Purchases did you made?

9. Which ratio is used to measure the efficiency of the business operations?

10. During the year ended 30 June, the owner of a business paid $2000 in

insurance. Of this amount $333 related to July and August 2010. How would

the amount $333 would be shown in the balance sheet at 30 June 2010?

11. What does the owner of a business need to report on the Business Activity

Statement?

12. Give 3 examples of depreciable non-current asset.

13. Seaview hotel has $40,000 worth of equipment and machinery in the

business and $15,000 cash in the bank. The hotel also has a loan for $12,000

and an overdraft of $5000. How much does Seaview Hotel have in Equity?

14. Roxy's Café had equity of $50,000. The Café had $25000 in inventory. $15,000

in accounts receivables and $60,000 in equipment and machinery. How much

does the Café have in liabilities?

15. Shirley operates a Pet Store. For the month of March 2010, she has made a

Net profit of $33,000. She also has $10,000 in capital, $50,000 in store fittings

and equipment and $29,000 in inventory. What is the amount of Shirley's

liability?