Unit 4.1 to 4.4 - Analysis of Business Transactions, Journalizin

Business documents are not required if there is an oral agreement with an external party.

• True

• False

The right-hand side of an account is called the increase side.

• True

• False

A transaction always involves exactly two accounts.

• True

• False

Assets, revenues, and drawings are all increased by debits.

• True

• False

Total debits must always equal total credits

• True

• False

A chart of accounts is organized in order of the accounting equation, with assets first, followed by liabilities and owner’s equity.

• True

• False

A journal is like a diary; it shows a chronological record of a business’s transactions.

• True

• False

If the debit part of a journal entry is not posted but the credit part is, assets will always be overstated.

• True

• False

Accounts are grouped in a book called the ledger

• True

• False

A trial balance proves the equality of the debits and credits at the end of the accounting period.

• True

• False