16. The double-entry system is possible because all business transactions have twoequal and opposite aspects.NAME:SCORE:SECTION:PROFESSOR:17. A decreaseowner's equity is recorded with a creditTrue or False18.When the owner makes an investment, the owner's Capital account is debited.1. A transaction with more than one debit and/or more than one credit is called acompound entryNotos receivable are claims against debtors ovidenced by a written promise to pay acertain sum of money at a definite time to the order of a specified person or to19.2.An increase in an asset is recorded by a debltbearer3The ledger is a chronological record of all transactions20. Liabilities are established with debits and eliminated with credits.4. When payment is recelved for services not yet rendered, no entry is recorded untilthat service has been rendered21. When a withdrawal is made, the owner's Withdrawals account is debited and CashIs credited5. When revenue has been earned, no entry is recorded until the related cash has22. When a company hires a new employee, a recordable event has occurred.been collected.23. When the columns of the trial balance ore equal, no errors have occurred inrecording and posting the transactlos6Recording 4,125 as 41 2500 s an example of a transposition24It is sometimos correct fer a compound entry's debit totals and credit totals to beunequal7.Unearned rgvenues arg classified as assets on the balance sheetInvestments by the owner are recorded In the owner's Capital account, not in arevenue account.8.The Land account and the Building account may be combined into one acCount9.A debit means that an account has been increased.20. The normal balance of any account refers to the side of the account-debit orcredit-where decreases are recorded10. A credit has an unfavorable effect on an account.27. Entering transactions into the journal is called posting11Another name for the journal is the book of original entry28. Cost is the exchange price associated with a business transaction at the time thetransaction is recognired12An increase in a liability is recorded by a debit13An increase in revenue is recorded with a credit79. In a trial balance, all debits are listed before all credits14. If equipment is bought by paying P20,000 ós a down payment and the remainingP40,000 in 30 days, total liabilities are increased by P20,00.30. The double-entry syttem means that transactions are recorded both in the journaland in the ledger.15A credit signifies increases in llabilities, capital, and revenues, and decreases inassets, withdrawals, and expenses4-21

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True or False 1. A transaction with more than one debit and/or more than one credit is called a compound entry 2. An increase in an asset is recorded by a deblt 3. The ledger s a chronological record of all transactions

True or False 1. A transaction with more than one debit and/or more than one credit is called a compound entry 2. An increase in an asset is recorded by a deblt 3. The ledger s a chronological record of all transactions

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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