1. Explain what cash basis means in this statement: “An income and expense statement should be prepared on a cash basis.” How and where are credit purchases shown when statements are prepared on a...

1. Explain what cash basis means in this statement: “An income and expense statement should be prepared on a cash basis.” How and where are credit purchases shown when statements are prepared on a cash basis?

2. Distinguish between fixed and variable expenses, and give examples of each.

3. Is it possible to have a cash deficit on an income and expense statement? If so, how?