Question 1 1.1 The main purpose of financial reporting is to: a Help the managers run the business b. Calculate the profit/loss made by the business. c. Enable investors to make financial decisions. d. Calculate the taxable income of the business. 1.2. The use of the same inventory system by a business each year is an example of: a Reliability b. Verifiability c. Timeliness d. Consistency a 1.3 Which of the following statements best describes the concept going concern: When current assets less current liabilities of a business become negative b. The income less expenses of a business become negative The ability of the business to continue in operation for the foreseeable future d. The potential to contribute to the flow of cash to the business c. 1.4 Which of the following terms describes information in the financial statements that is neutral: a Unbiased b. Reliable c. Relevant d. Material COAGA1-B22 - Supplementary Deferred Assessment Paper Block 2 2021V1.0 Page 3 of 10 1.5 Depreciation: a. Adds value to an asset b. Has a fixed rate of calculation c. Lessens the value of an asset d. Is subtracted from accumulated depreciation to get the total accumulated depreciation for a specific financial year (5*1 Mark)