1. What is accrual basis of accounting method? Why the accrual basis ofaccounting 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. Customerreceipts $654, interest paid $10. Calculate net fund of the business fromoperating activities.5. A business had net cash flows from operating activities of $64, frominvestment activities of -$42 and from financing activities of -$20. Calculatethe net cash position of the business.6. A business had $5 in the bank, accounts receivable of $6, accounts payableof $3, inventory of $4 and accrued expenses of $1. Calculate the current ratiofor 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 andCost 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 ininsurance. Of this amount $333 related to July and August 2010. How wouldthe 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 ActivityStatement?12. Give 3 examples of depreciable non-current asset.13. Seaview hotel has $40,000 worth of equipment and machinery in thebusiness and $15,000 cash in the bank. The hotel also has a loan for $12,000and 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. $15,000in accounts receivables and $60,000 in equipment and machinery. How muchdoes the Café have in liabilities?15. Shirley operates a Pet Store. For the month of March 2010, she has made aNet profit of $33,000. She also has $10,000 in capital, $50,000 in store fittingsand equipment and $29,000 in inventory. What is the amount of Shirley’sliability?
What is accrual basis of accounting method?
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