S. The field of accounting may best be described as: Recording the financial transactions of an economic entity Developing information in conformity with generally accepted accounting A) principles. The art of interpreting, measuring, and describing economic activity. Developing the information required for the preparation of income tax returns. D) 6. Which one of the following is not considered one of the three primary financial statements? A) Balance sheet. B) Income statement C) Statement of cash flows. D) Statement of business activities. 7. A balance sheet is designed to show: A) How much a business is worth. B) The profitability of the business during the current year C) The assets, liabilities, and owners' equity in the business at the particular date. D) The cost of replacing the assets and of paying off the liabilities at December 31. 8. The nature of an asset is best described as: A) Something with physical form that is valued at cost in the accounting records. An economic resource owned by a business and expected to benefit future operations. B) An economic resource representing cash or the right to receive cash in the near future. C) D) Something owned by a business that has a ready market value. 9. If a company purchases equipment for $60,000 cash: A) Total assets will increase by $60,000 B) Total assets will decrease by $60,000. C) Total assets will remain the same. D) The company's total owners' equity will decrease. 10. Which of the following is not a generally accepted accounting principle relating to the valuation of assets? A) The cost principle - in general, assets are valued at cost, rather than at estimated market values. B) The objectivity principle-accountants prefer to use objective, rather than