6. Evan owns his own business running a coffee shop in a downtown area. Which principle must he remember that no matter what he does as a business owner, he must keep his personal dealings completely separate transactions? a. Money Measurement b. Separate Entity c. Arm's Length Transaction d. Objectivity 7. The purpose of the Income Statement is a. To list all of the assets, liabilities and owners' equity accounts and their balances b. To tell whether or not a business made money or lost money in a given period c. To tell how much money made in a business was retained and reinvested in the business d. To list all the income accounts and their balances 8. Which of the following is the equation used for the basic income statement? a. Expenses + Revenue = Net Income or Net Loss b. Revenue + Expenses = Net Income or Net Loss c. Revenue - Expenses = Net Income or Net Loss d. Revenue/Expenses = Net Income or Net Loss 9. The method of accounting that recognizes revenue when money is received and expenses when bills are paid is called a. Managerial Accounting b. Forensic Accounting c. Accrual Basis d. Cash Basis 10. The method of accounting that recognizes revenue when it is earned and expenses when they are incurred is called: a. Income basis b. Managerial Accounting c. Accrual Basis d. Cash Basis 11. Which principle recognizes revenue when it is earned regardless of how cash flows? a. Revenue recognition principle b. Cash flow principle c. Matching principle d. Accrual principle