1) Amy is studying introductory accounting, and she believes that debit balances are favourable and credit balances are unfavourable. Is Amy correct? Explain. (2 marks)

Word limit: 150

2) Why might the financial information in a trial balance not be up to date and complete? Explain two reasons. (2 marks)

Word limit: 150

3) Louise cannot understand why the net amount of account receivable does not decrease when an uncollectable account is written off under the allowance method. Clarify this point for Louise. (2 marks)

Word limit: 150

4) The owner of a small business was heard making the following remark: break-even analysis has little relevance for my business. I am not in business to break even, but to make profits. Do you agree? Explain your position. (2 Marks)

Word limit: 150