true, (i) sometimes true, or(ii) never true. For those that are (ii) somet when
ID: 2414780 • Letter: T
Question
true, (i) sometimes true, or(ii) never true. For those that are (ii) somet when the statement is true. tements is 6) ah es tnue,exp 38 Part One Als Fundamentals 12. Statement evaluation. Determine whether each of the following stater a. Bookeeping and accounting are two ways of referring to the same thin b. If a transaction increases a liability, it will also increase an expense c. The accounting cycle involves human judgment. d. A company's chart of accounts should use block coding. e. Information technology has eliminated the need for human judgment in the acc f An "accrual" refers to a situation where a company provides service before g. An adjusting entry for depreciation recognizes an asset's loss in market value over tin accounting o h. Adjusting entries involve one balance sheet account and one income statement accounz never cash. i. In automated accounting information systems, block coding facilitates closing entries . The complete accounting cycle incorporates three different forms of a trial balance.Explanation / Answer
a)never true: since book keeping is simply concerned with recording of the transactions of the business whereas accounting involves analysing and interpretating the business data.
b)sometimes true: consider the 2 cases of increased liability
case 1: salary expenses $5000000 , out of which 50% will be paid in next month by the company so in this case our liability as salary payable rises and also the expense of salary is incurred for the period as per concept of revenue recognition, on accrual basis
case2: amount payable to john $300000, in this case only liabilty increases not the expenses
so this statement is sometimes true and not always.
c)Sometimes true; since accounting cycle also involves some estimates and assumptions like for depreciation and bad debts so in these cases, human judgement involves.
d)not true since companys chart of accounts basically involvesnames of all the accounts created by the company in its general ledger during the year like assets, liabilities, owner s equity, etc so no relevence of black coding here.
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