Index Number Signature SECTION A QUESTION 1 Read the case below and answer the question that follow. I am the owner of CSUC (a Merchandize Company). Several years ago, the company was struggling and finding cash just to operate was a daily problem. Needless to say, I was not sleeping very well. One day, the Commissioner of Tax called me and said the company's tax retum was ready and wanted me to stop by and go over it. When I arrived at his office, he had a big smile on his face as he extended his arm to shake my hand. "Fantastic job," he said, "you have really turned this company around and I am impressed how profitable it now is." Me, profitable? I had just been wondering how I was going to find enough cash to make payroll on Friday. I decided to come clean with him. "The truth is, I probably do not deserve your praise because I do not have enough cash to make payroll on Friday and I am really not sure I can keep the doors open for much longer," I said looking down in shame. "How can I be profitable when I do not have any money? Where did it all 30?" Required: Using relevant accounting concepts and standards discuss why cash is a fact but profit is an opinion Page 2 of 3