2. Section A: Multiple Choices Question (Choose the correct or the best answer) (Total: 20 marks) 1. The purpose of financial information is to A. provide inputs for decision making B. report profit c. pay tax to the ATO D. report to the bank The concept that a business has a reasonable expectation of remaining in business for the foreseeable future is called the A monetary unit assumption B. economic entity assumption C. time period assumption D. going concern assumption 3. Purchases of goods costing S500 excluding 10% GST. Which of the following correctly records the cash purchase? A. DR Purchases $500, DR GST Paid $50; CR Cash at bank $550. B. DR Purchases $500: CR Cash at bank $500. c. DR Purchases $450, DR GST Paid $50: CR Cash at bank $500. D. DR Purchases $550, CR Cash at bank $550. Which of the following expenses could be considered as capital expenditure? A Petrol costs for a motor van B Annual insurance premium on a building C. Maintenance on a building D. Installation of an air-conditioning system 5. A company owner's private petrol bills have been treated as part of the company's motor vehicle expenses. Which of the following entries corrects the error? A DR Drawings, CR Motor vehicle expenses. B. DR Motor vehicle expenses. CR Drawings c. DR Motor vehicle expenses. CR Capital D. DR Capital, CR Motor vehicle expenses. 4