1) All U.S. businesses use this system for accounting a) credit union guidelines  b) trade credit agency rules  c) GAAP d) EEOE 2) These statements summarize the results of your business operation and provide a picture of its financial position. a) financial reports  b) current asset journals  c) accounts payable reports d) owner's equity documents 3) Anything of value that a business owns is called a(n) a) curtail liabilities.  b) fixed costs.  c) liability. d) asset. 4) The amount your business owes to creditors is the a) variable costs.  b) assets.  c) owner’s equity. d) accounts payable. 5) Most businesses operate under this basis, which means you record income when it is earned and expenses when they are incurred. a) cash basis b) accrual basis  c) debit basic d) asset basis 6) Posting to this will keep your account balances accurate. a) income statement  b) pro forma income statement  c) general ledger d) ratio analysis report 7) Cash Receipts, Cash on Hand, and Sales are the main headings for a) a daily sales and cash receipts report. b) daily asset and liability reports.  c) fixed costs reports. d) sales commissions reports. 8) Which of the following is an ongoing accounting activity? a) preparing financial statements  b) tax records c) payroll records d) all of the above 9) The threat of a loss to your business without any possibility of gain is called a) pure risk.  b) speculative risk.  c) negligence. d) premium 10) The failure to exercise reasonable care is called a) factor.  b) robbery.  c) negligence. d) casualty insurance.

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