Question

Which of the following is false with regards to the double-entry system of recording transactions?

Group of answer choices

A)Each transaction affects at least one income statement account and at least one balance sheet account.

B)All of these are false.

C)Each transaction affects the balances of at least two different accounts.

D)None of these are false.

E)Each transaction is recorded with an equal dollar amount of debits and credits.

Answer 1

Answer : A)Each transaction affects at least one income statement account and at least one balance sheet account.

A transaction may not necessarily affect at least one income statement account and at least one balance sheet account.

For example, when we purchase an asset by paying cash, The balance of purchased asset is debited and cash(another asset) is creited, both being balance sheet items. Same applies to paying off debts, Receiving payment rom account receivables.

Both the other statements are true. When we receive cash $1000 from accounts receivables, Cash is debited and accounts receivables is credited with the same amount. And it effects 2 accounts.

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