1. a. Which of these effects of a single transaction on the accounting equation is not possible? Increase in assets at the same time as an equal increase in equity b. Decrease in assets at the same time as an equal decrease in liabilities Increase in liabilities at the same time as an equal decrease in liabilities. d. Decrease in liabilities and at the same time an equal decrease in equity. Type your answer here: c. 2. a. The bookkeeper recorded wages for the month as a debit to the Sales account rather than as a debit to wages expense. This error will result in: no effect on profit of the period. b. understated liabilities at the end of the period. understated assets at the end of the period. overstated profit for the period. Type your answer here: c. d. b. 3. Which statement concerning accrual accounting is true? a. Profit is the excess of cash inflows from income over cash outflows for expenses. Income from sales is recognised in the period when the cheque is cashed. For most businesses the cash approach gives a better measure of economic performance than does the accrual approach Income is recognised in the period when of economic benefits can be reliably measured. Type your answer here: c. 4. Which of the following statements about closing entries is true? a. Closing entries are made at the end of each accounting period whatever its length. b. Closing entries are only made at the end of the accounting year. e. With computerised accounting systems there is no need to close off the expense and income accounts. d. The profit or loss summary account is used regularly when processing transactions for sales and expenses