SECTION A-Multiple Choice Questions (20 Marks) Answer ALL questions from this section. Each question carries 4 marks. Answer: 1 2. 3. 4. 5. 1. A credit is used to record an increase in all of the following accounts except A. Utility Expense. B. Share Capital C. Accounts Payable. D. Service Revenue. 2. Generally, all of the following financial statements can be prepared with information from the trial balance except A. Income Statement. B. Statement of Cash Flows. C. Statement of Retained Earnings. D. Statement of Financial Position. 3. The Dividends account is increased with a debit because dividends A. are an expense. B. are declared an asset. C. reduce liabilities. D. result in a decrease in equity, so debiting Dividends would have the effect of decreasing Equity. 4. When a company pays cash for a truck, what is the effect on the accounting equation for that company? A. Increase assets and increase liabilities. B. Decrease assets and decrease liabilities. C. Increase assets and increase equity. D. No net change. 5. Gordon Company was recently formed with a $5,000 investment in the company by shareholders. The company then borrowed $2,000 from a bank, purchased $1,000 of supplies on account, and also purchased $5,000 of equipment by paying $2,000 in cash and signing a note for the balance. Based on these transactions, the company's total assets are A. $7,000. B. $9,000. C. $11,000. D. $12,000