II. True/False Questions (2 points each, 20points) 1. Accounting is a system that collects and processes financial information about an organization and reports that information to decision makers. 2. In accounting and reporting for a business entity, the accounting and reporting for the business must be kept separate from other economic affairs of its owners. 3. The accounting period in which service revenue is recognized (i.e., revenue for services rendered) is generally the period in which the cash is collected. 4. The payment of a cash dividend to stockholders increases stockholders' equity. 5. The financial statement that shows an entity's economic resources and its liabilities is the statement of cash flows. 6. Companies prepare financial statements at the end of each year and more often as needed. 7. One of the advantages of a corporation when compared to a partnership is the limited liability of the owners 8. A current liability is always a short-term obligation expected to be paid within one year of the balance sheet date. 9. Deferred revenue will appear on the income statement. 10. Repayments of bank loans should be charged to notes payable and credited to cash