7. Accounts can be classified according to their side of the balance sheet. Please name where these accounts would normally be classified. (eg Cash= Asset, Accounts Payable=Liability)

Equipment

Long Term Debt

Inventory

Retained Earnings

Common Stock

8. FASB and GAAP (accounting judges and arbiters) prefer Accrual accounting to Cash accounting. How does this preference relate to the Revenue Recognition Principle and the Matching Principle?

9.Depreciation often affects financial accounting reports in an important way with regard to the 2 sets of books that the government permits. What is depreciation?

10.Is depreciations affect, from a financial accounting perspective, usually positive or negative?

11.What is a Classified Balance Sheet?

12.How does the Classified Balance Sheet facilitate the development of the Current Ratio and its use?

13.What is the profit margin and how can it be used?