1. An accrual of wages expense would produce what effect on the balance sheet?
A. Increase liabilities and decrease equity
B. Decrease liabilities and increase equity
C. Increase assets and increase liabilities
D. Decrease assets and decrease liabilities
2. Which one of the following errors causes an overstatement of net income?
A. Failure to accrue revenue earned but not billed
B. Failure to record collection of an account receivable
C. Failure to record a portion of fees received in advance that is earned by year-end
D. Failure to record insurance expense.