92. Regarding the effects of end-of-period adjustments, state whether each of the following statements is true or false.
_____ a) Recording the usage of supplies involves a decrease in assets and a decrease in equity.
_____ b) The accrual of salaries is considered a clams exchange transaction.
_____ c) Recording services performed on a prepaid contract involves a decrease in liabilities and an increase in assets.
_____ d) End of period adjustments never affect cash flows.
_____ e) Failure to record accrued at the end of the year will cause reported income to be higher than it should have been.
93. Indicate whether each of the following statements regarding the four types of accounting events is true or false.
_____ a) Asset use transactions involve an increase in one asset and a decrease in another asset.
_____ b) An asset source transaction involves an increase in assets and an increase in a corresponding claims account.
_____ c) An asset exchange transaction involves an increase in an asset and a decrease in a claims account.
_____ d) Asset exchange transactions involve an increase in one asset and a decrease in another asset.
_____ e) Some claims exchange transactions involve an increase in a liability account and a decrease in an equity account.
94. Indicate whether each of the following statements about corporate governance is true or false.
_____ a) The Financial Accounting Standards Board issues a code of ethical behavior by which public accountants must abide.
_____ b) The Sarbanes Oxley Act created the Public Company Accounting Oversight Board (PCAOB).
_____ c) Because of the Sarbanes Oxley Act, many audit firms now provide nonaudit services to audit clients.
_____ d) The fraud triangle identifies opportunity, pressure, and rationalization as the three elements that are typically present when fraud is committed.
_____ e) An executive found guilty of falsely certifying a company's financial statements faces up to a $5 million fine and 20 years in prison.