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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Which of the following statements is true?

  1. a. Every transaction is recorded as an increase and/or decrease in only one account.
  2. b. One side of the equation does not need to equal the other side of the equation.
  3. c. Double-entry accounting is demonstrated by the fact that each transaction must be recorded in at least two accounts.
  4. d. When a business earns revenue, owner’s equity decreases.

To determine

Identify the true statement from the given options.

Explanation

Accounting equation: Accounting equation is a concept expressed in the form of equation, which creates a relation between resources or assets of a company and claims of resources to creditors and owners. Fundamental accounting equation is expressed as shown below:

Assets = Liabilities + Owners' EquityAssets = Liabilities+{(Owners' Capital)+(Owners' withdrawals)+<

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