1) A petty cash fund: A. Should have at least two custodians B. Is established to pay on-the-spot minor purchases. C. Should issue checks for certain purchases D. Is established to pay large nonrecurring expenses. 2) Adjusting entries are: A. Not needed under accrual-basis accounting. B. Prepared at the beginning of the accounting period to update all accounts. C. Prepared at the option of the accountant. D. Prepared at the end of the accounting period to update certain accounts. 3) The rules for recording accounting transactions will include all of the following EXCEPT: A. Every transaction's net amount on the left side of the equation must equal the net amount on the right side of the equation. B. Both sides of the accounting equation must be affected. C. Total assets must always equal total liabilities plus total equity. D. Every transaction affects the financial statement of the business. 4)if a company fails to record a sale on account: A. Revenue on the income statement will be overstated. B. Net income on the income statement will be correct C. Assets on the balance sheet will be understated. D. Accounts receivable on the balance sheet will be overstated. 5)___is the allocation of the cost of an asset over the asset's useful life A. Accrual. B. Expiration. C. Deferral D. Depreciation