Indicate whether each of the following statements is true or false.________ a) Every journal entry includes at least one debit and one credit.________ b) The double-entry accounting format always records two separate events simultaneously.________ c) The double-entry system requires that total debits equal total credits.________ d) When an asset decreases in a double-entry system, a stockholders' equity account may also decrease.________ e) The double entry system ensures the accuracy of a company's accounting records.
What will be an ideal response?
a) T b) F c) T d) T e) F
a) This is true. In a double-entry system, every journal entry includes at least one debit and one credit entry.
b) This is false. The double-entry format records each event separately although there are at least two components in each event.
c) This is true. Every journal entry must include equal debits and credits.
d) This is true. Thus, a decrease to an asset account may also include a decrease to a stockholders' equity account. For example, paying cash for salaries decreases assets (cash) with a credit and increases expenses (salaries expense). The debit to salaries expense actually decreases stockholders' equity (retained earnings).
e) This is false. Erroneous entries may still be entered into the accounting records, such as the following: the failure to record transactions; misclassifications, such as debiting the wrong account; or, incorrectly recording the amount of a transaction.
You might also like to view...
The Myers-Briggs Type Indicator (MBTI) identifies individuals' preferences for source of energy, means of information gathering, way of decision making, and
A. self-assessment. B. value system. C. succession planning. D. goal setting. E. lifestyle.
A Ritz-Carlton beach attendant who surprised a couple with flowers, candles, and champagne for the man's proposal was able to transmit the culture of the luxury hotel to other employees, so he would be considered a
A. champion. B. key employee. C. potential manager. D. hero. E. superior.
A cost can be an asset or expense depending on whether the future economic benefits have expired or not
a. True b. False Indicate whether the statement is true or false
A quasi contract can be best described as:
A. a contract where terms are stated orally only. B. an agreement that contains all but one of the basic elements needed to form an enforceable contract. C. contract-like duties imposed by the court to prevent unjust enrichment. D. a contract that has been fully performed.