Question 1 Multiple choice 10 Marks 1) Which one of the following is the underlying assumption of the Conceptual Framework on which financial statements are prepared: a) Relevance b) Going Concern c) Faithful Representation d) Reliability 2) Which of the following is considered by the Conceptual Framework as the primary user of financial information: a) Customers b) Employees c) Lenders d) Communities 3) Which one of the following is not a necessary element of an asset: a) Right b) Potential to produce future economic benefits c) Ownership d) Control 4) According to the accounting equation, which options describes Liabilities? a) Assets Liabilities b) Income Expenses c) Assets Equity d) Assets Expenses 5) The double entry system which results in the initial recognition of an asset would result in: a) An increase in the carrying amount of the asset b) The initial recognition of a liability c) The derecognition of a liability d) The decrease in the carrying amount of a liability 6) Which of the following rules for recognitions of transactions in accounts is incorrect? a) When an asset decreases, the relevant asset account is credited. b) When expenses increase, the expense account is debited. c) When drawings increase, the drawings account is debited. d) When capital decreases, the capital account is credited C