1. Accrual basis of accounting primarily refers to the ____________________ principle.

a) Going concern

b) Matching

c) Cost

d) Conservatism

2. Which one of the following transaction requires no change in total assets?

a) Purchase of an equipment with cash borrowed from a bank

b) Paying cash to reduce an outstanding accounts payable

c) Investing cash to start up the business

d) Collecting a monthly installment due from a credit sale from customers