QUESTION $1.$

Business entities can be in the form of manufacturing business, merchandlse business and

service business. Lets say you're analyzing the financlal statements a manufacturer, explain

the meaning of the term "matching concept". Include an example to lllustrate your explanation.

$(5$ marks$)$

QUESTION $2.$

Explain the meaning "retained earning" and can a company have a negative cash flow from

operations for the year on the statement of cash flows but stil have a net income on the income

statement? Explain.

$(5$ marks$)$

QUESTION $3.$

Discuss why accountants focus on average costs instead of actual costs when computing unit

costs. Include an example to llustrate your explanation.

$(5$ mark$8)$

QUESTION $4.$

What is sensitivity analysis? What variables might you consider changing if you were doing

sensitivity analysis?

$(5$ marks$)$