12) Which of the following serves as the justification for the recognition of expired cost? Cause and effect association C. Immediate recognition of an expense B. Systematic and rational allocation D. Minimization of income tax liability A 13) Each of the following errors will overstate net income of current year, except Equipment purchased in a prior year was expensed c. Accrued wages were not recorded at current year-end B. Current year end ending inventory was overstated D. PPE purchased in the current year was expensed A 14) In double-entry bookkeeping system which of the following may be used as basis for recognizing income and expenses? Cash basis Modified cash basis Accrual basis YES YES YES NO NO NO NO NO YES A B YES YES NO C. D. 15) Which of the following statements about income and expense recognition is (are) true? | The gross profit on sales computed under modifies cash basis is the same as the computed under accrual basis, II Both cash and modified cash basis will yield the same amount of operating expenses in the income statement. !!! In recording day-to-day transactions and events, all entities must follow accrual basis of accounting. A Only is true B. I and I are true C. and Ill are true D. All statements are true