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When cash is paid to a creditor, the firm's liabilities decrease.

1. When cash is paid to a creditor, the firm's liabilities decrease.
True False

2. A business transaction is a financial event that affects the resources of a business.
True False

3. If there is an excess of expenses over revenues, the excess represents a profit.
True False

4. A trial balance checks the equality of debits and credits.
True False

5. A withdrawal of funds by the owner for personal use is considered a business expense.
True False

6. The amount of net income or net loss is needed to complete the statement of owner's equity.
True False

7. On a typical chart of accounts, the accounts are arranged in the same order as they appear in the Financial statements.
True False

8. Increases in owner's equity are recorded with credits.
True False

9. Increases in the owner's drawing account are recorded with debits.
True False

10. Financial statements are prepared after the trial balance is prepared.
True False

File name: When-cash-is-paid.doc File type: application/msword Price: $4