QUESTION ONE (20marks) 1. Financial accounting serves which primary functions?() a. Measures business activities. b. Communicates business activities to interested parties. c. Make business decisions on behalf of interested parties. d. Both a. and b. are functions of financial accounting. 2.Which financial statement conveys a company's ability to generate profits in the current period?() a. Income statement b. Statement of cash flows c. Balance sheet d. Statement of cash flows 3.A debit is used to increase which of the following accounts?() a. Utilities expense b. Accounts payable c. Service revenue d. Common stock 4. A trial balance can best be explained as a list of () a. The income statement accounts used to calculate net income. b. Revenue, expense, and dividend accounts used to show the balances of the components of retained earnings. c. The balance sheet accounts used to show the equality of the accounting equation. d. All accounts and their balances at a particular date. 5. Which of the following accounts is not listed in a post-closing trial balance?() a. prepaid rent b. account payable c. salaries expense d. retained earnings 6. Which of the following is not a characteristic of adjusting entries? () a. Reduce the balance of revenue, expense, and dividend account to zero. b.Allow for proper application of the revenue recognition principle(revenue) or the matching principle(expense). c. Are part of accrual-basis accounting. d. Are recorded at the end of the accounting period