Question No.1... Total Marks-8) Short answer questions: a) Why do you think it is that the Balance Sheet is not part of the double entry system? b) Why do you think organizations bother with the two returns accounts? Why don't they just debit sales returned to the sales account and credit purchases returned to the purchases account? c) Do you agree with this view that the prudence concept results in accountants producing financial statements that understate profits and gains and therefore present a value for capital that is lower than it should be? Justify your answer. d) If services have been rendered to customers during the current accounting period but no revenue has been recorded and no bill has been sent to the customers, why is an adjusting entry needed? What types of accounts should be debited and credited by this entry? e) Explain the relationship between the matching principle and the need to estimate uncollectible accounts receivable. f) If a capital expenditure is erroneously treated as a revenue expenditure, will the net income of the current year be overstated or understated? Will this error have any effect on the net income reported in future years? Explain. g) Criticize the following quotation: "We shall have no difficulty in paying for new plant assets needed during the coming year because our estimated outlays for new equipment amount to only $80,000, and we have more than twice that amount in our accumulated depreciation account at present." h) Over what period of time the cost of various types of intangible assets should be amortized by regular charges against revenue? (Your answer should be in the form of a principle or guideline rather than a specific number of years.) What method of amortization is generally used