Select the best answer for each of the following

a. An example of a financing activity would not include

1) Purchasing delivery equipment

2) Issuing shares of stock to investors

3) Borrowing money from the bank

4) Issuing preferred stock

b. Which of the following statements is true?

1) The income statement reports all changes in assets, liabilities, and stockholders' equity of the business during the period.

2) Revenues and expenses are reported only on the balance sheet.

3) The statement of cash flows reports cash flows from three types of business activitiescash receipts, cash payments and investing.

4) On the statement of retained earnings, the net income for the period is added to the beginning balance of retained earnings.

c. Which of the following statements is false?

1) Accounting is the information system that measures business activities, processes that information into reports, and communicates the results to decision makers.

2) Financial statements report financial information about a business entity to decision makers.

3) Owners of a corporation are personally liable for the debts of the corporation.

4) The purpose of financial accounting is to provide information to people outside of the entity, such as investors and creditors.

d. Which of the following generally accepted accounting principles led to the lower-of-cost-or-market rule used in inventory valuation?

1) Matching principle

2) Full disclosure principle

3) Conservatism principle

4) Materiality principle

e. Which of the following statements is false?

1) Accounts payable decreases with a debit.

2) Unearned fees increases with a credit.

3) Office equipment increases with a debit.

4) Prepaid expense increases with a credit.