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 04/02/2012 for the course MKTG 300 taught by Professor Wong during the Spring '12 term at St. Xavier.

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