Section A: Multiple Choice Questions (10 marks) (2 marks cach, total 10 marks) All your answers must be HANDWRITTEN on the Online Test Answer Booklet provided. Choose the best answer. 1. When perpetual inventory system is used, which account should not be involved in the recording of a purchase return transaction? A. Inventory. B. Purchase return. C. Cash. D. Accounts Payable 2. Closing entries are: A. recorded normally at the end of each month. B. recorded to close the permanent accounts. C. recorded to reset certain accounts to zero. D. prepared before financial statements are prepared. 3. Accumulated Depreciation: A. is an asset account B. is a liability account. C. has a normal debit balance. D. has a normal credit balance. 4. Generally accepted accounting principles in use in Hong Kong: A. include the HKASs only. B. include only the recognition and measurement requirements. C. include the HKFRSs only. D. enable users to compare results of different companies. 5. The main target users of financial statements for decision making are: A. accountants and management B. government and management. C. investors and creditors. D. government and employees