2 TRUE OR FALSE: (1) When trading stock is sold, at least two general ledger accounts are affected. (2) Income from services rendered is credited to an income account, which then increases owner's equ

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1.2 TRUE OR FALSE

• 1.2.1 When trading stock is sold, at least two general ledger accounts are affected (e.g., Sales and Cost of Sales, or Cash/Debtors and Trading Stock).
  • Answer: True
• 1.2.2 Income from services rendered is credited to an income account, which then increases owner's equity at the end of the accounting period, not directly to the owner's equity account for current income.
  • Answer: False
• 1.2.3 Assets are resources controlled by the business from which future economic benefits are expected, which are essentially its possessions.
  • Answer: True
• 1.2.4 Any event in the business that has a monetary impact and is recorded in the accounting system is considered a transaction.
  • Answer: True
• 1.2.5 A receipt is a source document issued when money is received. When money is paid, a payment voucher or cheque counterfoil is typically used.
  • Answer: False

1.3 MATCHING QUESTIONS

• 1.3.1 Trading license, stationery, water, and electricity are all costs incurred in the operation of a business, making them expenses.
  • Answer: C
• 1.3.2 All money received by the business is systematically recorded in the Cash Receipts Journal.
  • Answer: D
• 1.3.3 The calculation of profit is determined by subtracting total expenses from total income.
  • Answer: A
• 1.3.4 The debts of the business are known as liabilities. While EFT (Electronic Funds Transfer) is a method used to pay debts, it is not what debts are. However, among the given options, and assuming each option is used once, EFT is the only remaining choice.
  • Answer: B