Accounting Principles: Asset and Equity Transactions

Front

If only one asset is affected by a transaction, what must be affected in the same way?

Back

An equity account must be affected in the same way.

Front

True or False: If only one asset is affected by a transaction, then an equity account must be affected in the same way.

Back

True.

Front

What happens to the accounting equation if a liability is increased?

Back

An asset must be increased or another liability must be decreased.

Front

True or False: Increasing a liability will always result in an increase in an asset.

Back

False. It could also result in a decrease in another liability.

Front

In a transaction affecting only liabilities and equity, what must remain unchanged?

Back

Assets must remain unchanged.