SECTION B $-$TRUE $/$ FALSE QUESTIONS $[10$ MARKS$]$

Answer ALL questions in this section. Each question carries ONE $(1)$ mark.

State whether each of the following statements is TRUE or FALSE.

$1.$ The Cash Conversion Cycle $($CCC$)$ is the sum of the inventory turnover and payables turnover.

$2.$ The Quick Ratio focuses on cash and inventory as components of working capital.

$3.$ In a general partnership, each partner is personally responsible for the debts and liabilities of

the business.

$4.$ Limited liability companies $($LLCs$)$ have the flexibility to choose whether they want to be

taxed as a partnership or a corporation.

$5.$ The balance sheet shows the financial position of a company at a specific point in time,

including its assets, liabilities, and equity.

$6.$ Accrual accounting recognizes revenue and expenses when they are incurred, not when the

cash is received or paid.

$7.$ Retained earnings represent the portion of a company's net income that is distributed to

shareholders as dividends.

$8.$ The matching principle in accounting states that expenses should be recognized in the period

in which they contribute to earning revenue.

$9.$ The revenue recognition principle requires revenue to be recognized in the accounting records

when it is earned, regardless of when the payment is received.

$10.$ The net profit margin is calculated by dividing operating income by total revenue and

represents the percentage of profit earned on each dollar of sales.

MASTERS