1. Which is the best description of the relationship between the Income Statement and the Balance Sheet?

		A. There is no direct relationship between the statement of comprehensive income and the Balance Sheet.
		B. The opening Balance Sheet plus the profit equals the closing Balance Sheet.
		C. The Balance Sheet is the link between two statements of comprehensive incomes.
		D. The Income Statement explains the change in equity that arises from operating activities.

2. Which statement about net profit is not true?

		A. Net profit belongs to the owners.
		B. Net profit is a measure of the business performance over a period.
		C. Net profit increases the cash balance.
		D. None of the statements, i.e., all are true.

3. When accounting information has the potential to change decision-making it is said to be:

		A. consistent.
		B. understandable.
		C. material.
		D. comparable.