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6. Generally accepted accounting principles are: a) Not used in the real world D Are required to make financial statement information relevant and reliable Are only used for internal reporting d) Are only used by auditors 1 Are only used for reporting to Canada Revenue Agency 720-21-TALMein 7. The accounting equation can be stated as a) Assets non-owner's equity equity bl Liabilities assets-equity c) Assets - liabitis equity d Equity assets - Babilities el All of these answers are correct. & A debitis med to record a) An increase in a liability account b) A decrease in an asset account c) A decrease in the withdrawals account . An increase in an asset account e) An increase in a revenue account 9. An asset created by a payment for economic benefits that do not expire until some water time *) Recorded as a debitte an unearned revenue account b) Recorded as a debit to a prepaid expense account c) Recorded as a credit to an uneared revenue account d) Recorded as a credit to a prepaid expense account e) Not recorded in the accounting records 10. The current ratio a) is used to measure a company's profitability b) is used to measure the relationship between asets and long-term dett Measures the effect of operating income on profit d used to evaluate a company's ability to pay its short-term obligation e) Only relates to long term liabilities 11. The current ratio: a) is currentes divided by current liabilities D Helps to assess a company's ability to pay its debts in the near future c) Suggests there may be problems in a business if it as less than 1 as a measure of a company's liquidity. e) All of these answers are correct 700-TAL-M