Question:
Determine whether each statement is true or false.
1. Every accounting transaction affects both the balance sheet and the income statement.
2. An independent auditor's (CPA's) report is a guarantee that the financial statements are free from fraud or material error.
3. GAAP stands for Generally Accepted Auditing Procedures.
4. Accumulated depreciation is increased when depreciation is recognized.
5. A cost can be an asset or expense depending on whether the future economic benefits have expired or not.
6. With few exceptions, the balance of all accounts should be on the side of the T account that causes the increase.
7. The credit side of an account is the right side, while the debit side is the left side.
8. Financial statements should be prepared before any adjustments are made.
9. The excess of current assets over current liabilities is referred to as working capital.
10. The general ledger is sometimes called the book of original entry because it is the accounting record where transactions are first recorded.
Bookkeeping:
Bookkeeping is a process of recording business transactions, summarizing, classifying up to the preparation and submission of financial statements that are free from fraud and material error or omission.
Answer and Explanation:1
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1. Every accounting transaction affects both the balance sheet and the income statement.
False. There are transactions that can affect only the...
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