9 A double-entry accounting system ensures that: (a) it is impossible to make a mistake after each transaction is recorded. (b) total assets will always equal total liabilities. (c) the balance-sheet remains balanced after each transaction is recorded. (d) the entity's finances will always equal any loan balance 10. What would the dual effect of paying $10000 off a creditor's account be? (a) Reducing cash at bank and increasing accounts payable by $10000 (b) Increasing cash at bank and increasing accounts payable by $10000 (c) Reducing cash at bank and decreasing accounts payable by $10000. (d) Reducing creditors and reducing accounts payable by $20000 11. In the definition of an asset, what does the 'future economic benefit' refer to? (a) Service potential (b) Cash potential only of the asset (c) Benefit to the economy (d) Legal ownership 12. What is a bank overdraft similar to? (a) A short-term loan from the bank (b) A mortgage over 30 years (c) A general reserve account for a large company (d) A cash dividend paid by a bank 13. The monetary concept refers to the fact that before an item can be recognised and recorded in financial statements, it must: (a) first be converted to cash in the accrual accounting system. (b) appear in a cash flow statement (c) be measured reliably. (d) be measurable in monetary terms. 14. What is a reason a bank loan to a business is considered a liability? (a) The loan is usually taken over a long period. (b) The entity must make future sacrifices to pay off the interest and loan. (c) Cash is involved. (d) An objective judgement can be made on its total value at a point in time. 15. A foreign-currency translation reserve will appear in financial statements only if: (a) entity has an overseas entity (or entities) that it controls. (b) the entity is required to produce consolidated statements. (c) there is a rise or fall in a country's exchange rate. (d) the country's exchange rate is pegged against the US dollar