25. Elsie owns a small business. At the end of the month, Elsie needed to make adjusting entries to prepare statements on the accrual basis. Which two of the following six possibilities occurred as a result of each of the following adjustments - an asset increased, an asset decreased, a liability increased, a liability decreased, equity increased, or equity decreased:
a. An accrual for salaries that were due to an employee, but were not paid
b. An adjustment for depreciation on Elsie's store fixtures
c. An adjustment for the expiration of prepaid insurance
d. An accrual for interest earned on a certificate of deposit that had not matured
26. State whether each of the following statements is true or false. Explain the true statements and discuss why the false statements are false. Use illustrations in your answer.
a. An asset cannot be created by incurring a liability.
b. One thing the accounting equation says is that assets are equal to the sources of the assets.
c. If a transaction causes an asset to increase, another asset cannot simultaneously decrease.