Which of the following statements is false? If every transaction is recorded wit
ID: 2334818 • Letter: W
Question
Which of the following statements is false?
If every transaction is recorded with equal debits and credits, then the sum of all the debits to the accounts must equal the sum of all the credits.
Dividends are increased with a debit because dividends reduce stockholders' equity.
On September 17th, Aggie hired an employee to begin work on October 1. The employee's weekly salary is $50 for a 5-day work week, payable every 2 weeks - the first payment will be made on the 14th. Aggie will make no entry on September 17th.
Every transaction affects one account from the income statement and one account from the balance sheet.
A debit entry to the account unearned revenue indicates that the company has fulfilled an existing obligation.
A.If every transaction is recorded with equal debits and credits, then the sum of all the debits to the accounts must equal the sum of all the credits.
B.Dividends are increased with a debit because dividends reduce stockholders' equity.
C.On September 17th, Aggie hired an employee to begin work on October 1. The employee's weekly salary is $50 for a 5-day work week, payable every 2 weeks - the first payment will be made on the 14th. Aggie will make no entry on September 17th.
D.Every transaction affects one account from the income statement and one account from the balance sheet.
E.A debit entry to the account unearned revenue indicates that the company has fulfilled an existing obligation.
Explanation / Answer
Correct Option--- (D) Every transaction affects one account from the income statement and one account from the balance sheet.
Explanation
It is not necessary that every transaction affects one account of income statement and one account of balance sheet. A transaction may affect two assets accounts in which one asset increases and other decreases or transaction involving two liability accounts.
Examples are given below for better understanding
Other statements stated above are correct.
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