Chapter 1-8 Accounting True or False Questions

True

If the previous account balance and the current entry posted to an account are both credits, the new account balance is a credit.

True

Temporary accounts are used to accumulate information until it is transferred to the owner's capital account.

False

The drawing account is a permanent account.

True

The formula for calculating net income is total revenue minus total expenses.

True

The source document for an electronic funds transfer is a memorandum.

False

A balance sheet reports financial information for a period of time.

False

A transaction for the sale of goods or services results in a decrease in owner's equity.

False

A transaction recorded in a journal is not considered a permanent record.

True

Adjusting entries must be posted to the general ledger accounts.