Angela Has a Monthly Gross Income of $3,000 and Her

question 14

Multiple Choice

Angela has a monthly gross income of $3,000 and her expenses are $1,200.What is her back-end ratio?

• A) 25%
• B) 30%
• C) 40%
• D) 45%

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Definitions:

Correcting Entries

Journal entries made in accounting to correct previously made errors or adjustments in the financial statements.

Accrual Basis

An accounting method that records revenues and expenses when they are earned or incurred, regardless of when cash is exchanged.

Generally Accepted Accounting Principles

Generally Accepted Accounting Principles (GAAP) are a collection of commonly followed accounting standards and procedures for financial reporting.

Cash Basis

An accounting method where revenues and expenses are recorded only when cash is received or paid, regardless of when transactions occur.