Section II: Multiple Choice. Read each statement carefully, then circle the letter of the correct answer. (2 pts. each) 6. Carriage inwards is charged to the trading account because: a) It is not a statement of financial position b) It is not part of motor expense c) Returns inwards goes in the trading account d) It is basically part of the cost of buying goods 7. Depreciation is: a) The cost of a current asset wearing away b) The cost of a replacement for a non-current asset c) The salvage value of a non-current asset d) The part of the cost of the non-current asset consumed during its period of use by the business 8. A bank reconciliation statement is: a) Drawn up by the bank regularly and kept by them b) Sent by the bank to us monthly c) Drawn up by us to verify our cash book balance with the bank statement balance d) Sent to the bank when we have made an error 9. A debit balance brought down on an insurance account mean that: a) We owe that insurance on that date b) We have paid too little insurance c) We have paid that insurance in advance on that date d) We have paid too much insurance 35