Multiple choice: 1. Which of the following is incorrect regarding profit? A. Profit is measured only indirectly as an arithmetical difference. B. Profit increases equity. C. Profit is the excess of total income over total expenses. D. Profit is earned if total income is less than total expenses. 2. An increase to an account is recorded A. in the debit side of that account. B. in the credit side of that account. C. beside the account. D. in the side of that account that represents its normal balance.

Q: WHICH STATEMENT IS FALSE? A. If the net income of prior period is overstated because of the change…

A: The correct answer for the above mentioned question is given in the following steps for your…

Q: 3) State the decrease side (debit or credit) for each of the following accounts. a. Prepaid Expenses…

A: All the assets, expenses, and losses have a normal debit balance and if it decreases then it should…

Q: Consider the following statements: I. For Income Statement accounts, evidence is considered to Be…

A: Income statement is a statement which records the revenue and expenses of an undertaking for a…

Q: Accrued revenues represent revenues ?received after they are earned False

A: Solution: Accrued revenues are revenues that are earned but yet not received. These are shown as…

Q: Net Income or Net Profit a.Net Income is less than Net Profit b.Are the same c.Net Profit is the…

A: Net Income or Net profit means when all the expenses has been deducted and net amount is calculated.

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A: Explanation: 1. Nominal Account: Nominal Account includes the accounts which are related with…

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A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: True or false. Debit Increases in assets and expenses, decreases in liabilities and revenue?

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Q: A credit to fees earned account will increase the balance of the fees earned account? a.True b.False

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Q: None

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A: Increase in assets should be debited and decrease in assets should be credited.

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A: The T-accounts are prepared with posting of journal entries to specific accounts.

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A: The answer for the multiple choice question and relevant explanation are presented hereunder :

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is