Accounting I Fall 2023 Final

Front

The accounting equation is most often stated as Assets + Liabilities = Owner’s Equity. True or False?

Back

False

Front

After each transaction, the accounting equation must remain in balance.

Back

True

Front

A negative amount for net worth would reflect more debt than assets, something a creditor would favor.

Back

False

Front

When two asset accounts are changed in a transaction, there must be an increase and a decrease.

Back

True

Front

Is detailed information about changes in owner’s equity needed by owners and managers to make sound business decisions?

Back

True

Front

When items are bought and paid for at a future date, another way to state this is to say these items are bought on account.

Back

True

Front

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

Back

False

Front

Keeping separate the financial records for a business and for its owner’s personal belongings is an application of the Business Entity accounting concept.

Back

True

Front

An expense is a decrease in owner’s equity resulting from the operation of a business.

Back

True

Front

Business ethics are the principles of right and wrong that guide an individual in making decisions.

Back

False