7) Which one of the following statements is false with regards to adjusting entries: a) The purpose of adjusting entries is to enable financial statements to reflect the cash basis of accounting b) Adjusting entries are performed on the last day of an accounting period c) For each adjusting entry, an income and balance sheet account is affected d) Adjusting entries are performed to allow transactions to meet the definition of income and expenses 8) Company TBD Ltd buys a manufacturing machine on credit for R1 500 000. Which of the following statements correctly describes TBD's change in net asset immediately after this transaction? a) There has been a decrease in net asset value as the new asset will be depreciated and will need maintenance. b) There has been an increase in net asset value as TBD now has added a new manufacturing asset. c) No change in net asset value as the increase in assets resulted in an equivalent increase in liability. d) None of the above 9) Which one of the following defines fair value? a) The discounted future expected cash flows, or other economic benefits that an entity expects to receive from the use of an asset and its eventual disposal. b) The price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. c) The current prices in the market in which the entity would acquire the asset or would incur the liability. d) None of the above 10) Which one of the following account types are not closed off to the profit and loss account? a) Income account b) Trading account c) Liabilities account d) Expense account