QUESTION 1 [20 MARKS (a) Identify either True or False statement of all questions. Accounting is the language of business. 2 Keeping personal records separate is an application of the business entity. 1 3 4 Assets such as cash and supplies have value because they can be used to acquire other assets or be used to operate a business. The relationship among assets, liabilities and owner equity can be written as an equation. The accounting equation does not have to be in balance to be correct. 5 6 7 8 The sum of the assets and liabilities of a business always equals the investment (share) of the business owner Recording business costs in term of hours required to complete projects is an application of the unit of measurement concept. The capital account is an owner's equity account. If two amounts are recorded on the same side of the accounting equation, the equation will no longer be in balance. In keeping with the principles of materiality, important items must be recorded instead of being left out or merged with other items. 9 10 [10 marks