1. Negative cash flow:

a. results when cash receipts exceed cash payments.

b. is included in the pro forma income statement.

c. is common for a business during its phase of expansion.

d. is needed for E-business only.

e. can cause a firm to fail.

2. Statement A. Cash flow is not the same as profit.

Statement B. Cash flow is the difference between cash actually received and cash disbursed.

a. Neither statement is correct.

b. Statement A is incorrect, while statement B is true.

c. Statement B is incorrect, while statement A is true.

d. Statement B alone is inaccurate.

e. Both statements A & B are correct.

3. The basic balance sheet relationship is:

a. assets plus owner's equity equal liabilities.

b. assets plus liabilities equal owner's equity.

c. assets equal owner's equity minus liabilities.

d. assets equal entrepreneur's incomes.

e. assets equal liabilities plus owner's equity.