The only business transactions which are entered in accounting records are those which can be expressed in monetary terms.

A transaction which causes a decrease in an asset may also cause an increase in another asset, a decrease in a liability, or a decrease in owners' equity.

The ledger is called the book of original entry because it is the accounting record where transactions are first recorded.

A trial balance proves that all transactions were correctly journalized and posted to the ledger.

The matching principle matches revenue earned with the assets that produced the revenue.

The matching principle is defined as debits always equalling credits.

When a separate statement of retained earnings is prepared, the amount of retained earnings no longer appears in the balance sheet.

The accounting standards and concepts used in the preparation of financial statements are called Certified Principles of Accounting (CPA).

The book value of an asset is equal to the asset's cost less accumulated depreciation.

The statement of cash flows is another name for the income statement.

Dividends paid increase expenses.

An account will have a credit balance if the debit balance amounts exceed the credit balance amounts.

The normal balance of any account is the side which increases that account.

The unearned revenue account is classified as an asset.

When a collection is made on Accounts Receivable, total assets will remain the same.

The right side of an account is the debit side.

An adjusting entry affects a balance sheet account and an income statement account.

Under the accrual basis of accounting, cash must be received before revenue is recognized.

A post-closing trial balance will show only income statement accounts.

A credit to a liability account indicates a decrease in the amount owed to creditors.

A company that receives money in advance of performing a service debits cash and credits unearned fees.

The time period assumption states that the economic life of a business can be divided into artificial time periods.

The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the book value of the asset.

An item is considered material if it is likely to influence the decision of an investor or creditor.

In a periodic inventory system, Inventory and Cost of Goods Sold accounts are kept up-to-date throughout the accounting period.