Question 1 (a)

An advantage of market basis is that it conforms to generally accepted accounting principles.

Question 6 :

True False

Question 1 (b)

A cash flow statement includes principal payments made on loans while an income statement does not.

Question 7 :

True False

Question 1 (c)

If a farmer is using the cash basis income statement, prepaid expenses paid in November 2021 for the 2022 crop year will be included in the 2022 income statements.

Question 8 :

True False

Question 1 (d)

Depreciation is classified as a cash cost.

Question 9 :

True False