Reference no: EM132473894

Question 1. Indicate whether each of the following statements is true or false by entering a T or an F in the space provided. Explain the reason for each F response in the space provided.

Problem A. When business transactions occur, at least three of the individual balance sheet items must change.

Problem B. A transaction takes place, leaving a business in a better financial position. Therefore Capital has most likely increased.

Problem C. When equipment valued at $4000 is sold for $1000 cash, the items affected are Cash and Equipment.

Problem D. The objectivity princple is an accounting standard related to source documents.

Problem E. At the end of the month, the inventory of supplies has decreased by $350. This transaction causes Capital to increase

Problem F. The business papers that inform the accounting department of transactions that require an accounting entry are called balance sheets.

Problem G. The owner's withdrawal of cash for personal use reduces Cash and Accounts Payable.

Problem H. The formula for referencing cell B44 in the worksheet titled Balance Sheet is ='Balance Sheet'

Question 2. What is a business transaction?