2026-2027 Actual Complete Real Exam Questions And
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Why is net income lower than revenue - ANSWER -
Expenses reduce total
amount
earned
Why positive net income but low cash - ANSWER -Non-
cash expenses &
accrual accounting impact
cash flow
Why $100k revenue but $85k receipts - ANSWER -Customers
have not yet paid
Limitation of the balance sheet - ANSWER -Does not
include future
performance
Stock issuance increases which equity category - ANSWER -
Paid-in capital
Why are raw materials assets - ANSWER -They have future
economic value
, Balance sheet limitation shown by missing legal obligations -
ANSWER -May
not account for contingent
liabilities
Where record $350 owed to farmer - ANSWER -Short-term
liability
Building purchased is what type of asset - ANSWER -Long-term
tangible asset
Yellow Leaf Bookstore owners' equity balance - ANSWER -
$36,000
What is carried over in incremental budgeting - ANSWER -
Past year's actual
performance
Bottom-up incremental budgeting - ANSWER -Budgeting that
starts with plant
managers?
Limitation of incremental vs zero-based budgeting - ANSWER
-May carry over
inefficiencies without
review