Section 1: 30 Multiple Choice questions (2 points each 1. The statement that reports on the profitability of a business entity is the a) income statement b) halance sheet e) statement of cash fows di statement of owner's equity e) hone of the above 2. When a business entity collects an account receivahles a) an asset is increased and owners equity is incresed b) an asset is increased and liability is increaned c) an asset is increased and a second asset is decreased d) an asset is increased and owner's equity is decreased 3. The tollowing would not appear en an income statement: a) revenues b) expenses e) withdrawals d) net loss 4. The operating cycle is: a) the average length of time between the purchase of inventory and the realization of cash from the sale of inventory b) the length of time it takes to bill customers c) the lenth of time it takes to pay the current iabilities d) the average length of time between the purchases of a long- term asset and its disposal 5. Internal financial reports are prepared exclusively for: a) the management group b) the financing group c) the public group d) all of the above