Questions 170 through 171 refer to the following busi-The outlook on a business’ financial
ness card.situation can similarly depend on whether thebusiness follows a cash method or an accrualmethod of accounting. In a cash method of
HILLIARD CONSTRUCTION
accounting, income is reported only asQuality home building payment is received, while the accrual methodfrom the foundation to the roofof accounting records income as soon as theMarcos Gilsale is made. So, using the accrual method, if itGeneral Contractortakes a buyer three months to send a check for4121 Las Palmas Ave. TEL: 619-574-0835the goods and services provided, then aSan Diego, CA 92100 FAX: 619-574-0835business may have trouble meeting its cash flowwww.buildwithhilliard.comneeds in the interim, while still showing aE-MAIL:
[email protected]. For this reason, many small businessesprefer to use the cash method. The cashmethod is simpler and offers a more realistic170.What information is not provided on this card?picture of a business’ finances at any given
a. Marcos Gil’s phone numbermoment in time. The accrual system, however,
b. Marcos Gil’s titleallows for more sophisticated analysis, which
c. the hours of operationcan consolidate several facets of business
d. the company sloganmanagement into a single operation.171.What does the company do?172.What best states what this article is mostly
a. builds housesabout?
b. writes contracts
a. how businesses can use different methods of
c. makes websitesaccounting to look less profitable for tax
d. constructs roadspurposes
b. how the accrual method compares to the
