1._____ refers to converting a noncash item to cash, for example, collecting an account receivable.

a.

Actualization

b.

Recognition

c.

Realization

d.

Materialization

e.

Transformation

2.The _____ matches revenues with the costs associated with earning those revenues and is not sensitive to the timing of expenditures.

a.

tax basis of accounting

b.

modified accrual basis of accounting

c.

cash basis of accounting

d.

accrual basis of accounting

e.

present value basis of accounting

The equation that describes the relationship between the balance sheet and the income statement through the Retained Earnings account is as follows:

a.

Retained Earnings (beginning) - Net Income = Retained Earnings (ending)

b.

Retained Earnings (beginning) + Net Income + Dividends = Retained Earnings (ending)

c.

Retained Earnings (beginning) - Net Income - Dividends = Retained Earnings (ending)

d.

Retained Earnings (beginning) - Net Income + Dividends = Retained Earnings (ending)

e.

Retained Earnings (beginning) + Net Income - Dividends = Retained Earnings (ending)