14 Which of the following will cause a change in the retained earnings account balance? a. Net profit or loss. b. All of the listed answers. c. Prior period adjustment. d. Payment of dividends. Question 15 What is the accrual basis of accounting? a. Matching expenses with revenue in the appropriate accounting period. b. Both (b) and (c). c. Recognition of revenue in the accounting period when the sale is made rather than when cash is received. d. Recognition of revenue when it is received in cash. Question 16 What is implied if the inventory account has decreased? a. Cash flow from operating activities has increased relative to net income. b. Cash flow from financing activities has increased relative to net income. c. Cash flow from operating activities has decreased relative to net income. d. Cash flow from financing activities has decreased relative to net income. Question 17 Additional information helpful to the analysis of accounts receivable and the allowance account is provided in the schedule of valuation and qualifying accounts. True False