Choose the best answer for each of the following questions [20* 2 mark each): 1. The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called: A. Cash basis accounting. B. Operating cycle accounting. C. Accrual basis accounting. D. Revenue recognition accounting. 2. During a period of steadily rising costs, the inventory valuation method that yields the highest reported net income is: A. Specific identification method. B. Average cost method. C. Weighted-average method. D. FIFO method 3. Which of the following principles states that a business's financial statements must report enough information for outsiders to make knowledgeable decisions about the company? A Conservatism B. Materiality concept C. Disclosure principle D. Consistency principle 4. Merchandise inventory: A. Is a long-term asset. B. Is a current asset. C. Includes supplies the company will use in future periods