Direction: Encircle the letter of the correct answer 1. 1. Information contained in the financial statements is useful to the a. Owners of the firm only b. Creditors and customers of the firm only c. Owners of the firm, creditors and customers of the firms only d. None of the above 2. The income statement provides information about a. The results of the business operation b. The resources acquired by the firm, including where the resources come from c. The functioning of the accounting system d. None of the above 3. The statement of changes in equity a. Has no relationship with the balance sheet b. Indicates whether the cash position of the entity will permit withdrawals by the owner c. Provides link between the income statement and the balance sheet d. None of the above 4. What financial statements are prepared as of the end of the accounting period a. Income statement only b. Balance sheet and Statement of Owner's Equity only c. Income Statement, Balance Sheet, and Statement of Owner's Capital d. None of the above 5. Which of the following items would not have any effect on the income statement a. Revenue from service rendered b. Salary Expense c. Drawings made by the owner d. None of the above 6. Revenues are a. The using up of the firm's assets b. A special kind of growth in the firm's assets c. A special kind of decrease in the firm's assets d. None of the above