01 - SOLUTION Problem 1-2

01 - SOLUTION Problem 1-2 - be put into the accounts. T 9....

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Problem 1-2 Solution – True / False Questions for Chapter 1 T rue or F alse F 1. After certain types of transactions it is OK for the accounting system to have more Total Assets (stuff) than Total Liabilities + Owners’ Equity (claims-to-stuff). F 2. Asset (stuff) accounts track the dollar amount of a physical asset and who owns that physical asset. T 3. The main purpose of Liability accounts is to keep track of non-owners’ claims to an organizations assets. T 4. The main purpose of Equity accounts is to keep track of owners’ claims to an organizations assets. F 5. In an accounting system, if Total Assets are not equal to Total Claims-to-Assets, then the Balance Sheet report will simply be relabeled as the UnBalance Sheet report. F 6. The Debit side of an asset account is the left side and the Debit side of a liability account is the right side. T 7. The Credit side of all accounts is the right side. T 8. In an accounting system that uses Debits and Credits, only positive numbers will
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Unformatted text preview: be put into the accounts. T 9. The following is a correct summary of the increase / decrease rules for accounts: • In all Asset accounts, if the amount is placed on the left (debit) side of the account, the balance in the account is increased. • In all Liability accounts and all in Equity accounts, if the amount is placed on the right (credit) side of the account, the balance in the account is increased. • In all Asset accounts, if the amount is placed on the right (credit) side of the account, the balance in the account is decreased. • In all Liability accounts and all in Equity accounts, if the amount is placed on the left (debit) side of the account, the balance in the account is decreased. F 10. The Trial Balance lists all of the transactions that were entered into the Asset, Liability, and Equity accounts....
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This note was uploaded on 12/17/2010 for the course ACC 311 taught by Professor Charrier during the Fall '08 term at University of Texas at Austin.

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