4 Multiple Choice Accounting Questions (refer to Accounting Questions 2.png)

The balance sheet is useful for analysing all of the following except a. liquidity. b. solvency. Oc. profitability. O d. financial flexibility. Question 6 (1 point) The practice of matching: )a. dictates that efforts (expenditures) be matched with associated cash flows. Ob. requires arbitrary allocation of an asset's contribution to a revenue stream. )c. illustrates the cause and effect relationship between money spent to earn revenues and the revenues themselves. O d. is required by GAAP to approximate an asset's contribution to anentity's periodic cash flow. Question 7 (1 point) A local business man owns several different companies. His accountant prepares separate annual financial statements for each of these businesses. This is an application of which of the following principles: a. Full disclosure Ob. Periodicity Oc. Economic entity O d. Matching Question 8 (1 point) The essential characteristic(s) of accounting is (are) ()a. communication of financial information to interested persons. b. communication of financial information about economic entities. c. identification, measurement, and communication of financial information. O d. all of these