Accounting Chapter 1 T/F

if two amounts are recorded on the same side of the accounting equation, the equation will no longer be in balance. true or false?

false

recording business costs in terms of hours required to complete projects is an application of the unit of measurement concept.true or false?

false

the accounting equation does not have to be in balance to be correct. true or false?

false

the sum of the assets and liabilities of a business always equals the investment of the business owner. true or false?

false

when a company pays insurance premiums in advance to an insurer, it records the payment as a liability because the insurer owes future coverage. true or false?

false

when a company receives cash from a customer for a prior sale, the transaction increases the cash account balance and increases the accounts receivable balance. true or false?

false

when cash is paid for expenses, the business has more equity. true or false?

false

when cash is paid on account, a liability is increased. true or false?

false

a sale for which cash will be received at a later date is called a charge sale. true or false?

true

a withdrawal decreases owner's equity. true or false?

true

accounting is the language of business. true or false?

true

assets such as cash and supplies have value because they can be used to acquire other assets or be used to operate a business. true or false?

true

keeping personal and business records separate is an application of the business entity concept. true or false?

true

the accounting concept realization of revenue is applied when revenue is recorded at the time goods or services are sold. true or false?

true

the capital account is an owner's equity account. true or false?

true

the relationship among assets, liabilities, and owner's equity can be written as an equation. true or false?

true

when cash is received from a sale, the total amount of both assets and owner's equity is increased. true or false?

true

when items are bought and paid for later this is referred to as buying on account. true or false?

true