Choose the letter that contain the correct answer. 1. One of the following statement is true a) Assets = Capital + Drawings b) Assets Liability = Capital Income c) Assets Capital = Current assets d) Assets + Liability = Owners equity e) Assets Liability = Owners equity 2. Credit entries in the ledger accounts will a) Increase both assets and liability b) Increase both income and expense c) Decrease both assets and liability d) Decrease both assets and drawings e) Decrease assets and increase expense 3. One of the following statements is not true a) The sales journal is also called debtors journal. b) The sales journal is a book of prime entry of credit sales. c) The sales journal is a book of original entry of cash sales. d) The sales journal is not a source document. e) The sales journal is not cash receipt journal. The following details refer to Questions 4 and 5: Total assets amount is N$120 000 Total liabilities are three quarter ( ) of owners equity/capital. 4. What is the amount of total liabilities? a) N$96 000 b) N$90 000 c) N$24 000 d) N$15 000 e) N$10 000 5. What is the amount of owners equity/capital? a) N$96 000 b) N$90 000 c) N$24 000 d) N$15 000 e) N$10 000Page 10 of 14 6. Bob uses his business account to pay for his monthly personal rent bills. State the accounting principle or concept that was not adhered to a) Matching concept b) Prudence c) Accounting entity d) Accounting period e) Going concern 7. A piece of land bought in year 2010 for N$110 000 was recorded at that price even though it was valued at N$200 000. Which accounting principle or concept is adhered to? a) Matching concept b) Monetary unit c) Accounting entity d) Historical cost e) Going concern 8. Inventory is valued at the lower of cost. This is an example of: a) Matching concept b) Monetary unit c) Accounting entity d) Historical cost e) Prudence 9. Financial accounting a) Has its primary emphasis on the future b) Provides data for internal use by managers of a business c) A branch of management accounting d) Concerned with the provision of information to help managers make decisions e) Is required by regulatory bodies 10. Motor vehicle purchased on credit from Toyota cc. Which account is debited? a) Purchase returns a/c b) Motor vehicle a/c c) Purchase a/c d) Creditor a/c e) Toyota cc a/c