True or False Write the word TRUE if the statement is correct and FALSE if the statement is wrong.

1. A withdrawal by the owner is recorded as a deduction from the assets and an increase in equity.
2. Payment of liability will not affect total assets but will cause total liabilities to decrease.
3. When business receives cash, it is always recorded as an increase cash.
4. The owners withdrawal account decreases owners equity.
5. The liability created when supplies are bought on cash basis.
6. Capital represents the owners investment or equity in the business.
7. Every transaction is recorded in terms of increases and or decreases in two or more accounts.
8. Every transaction affects one account only.
9. Expenses increases owners equity.
10. When services are rendered by the business, it decreases revenue.
11. When there is a purchase of equipment on cash, it increases liabilities.
12. Expenses paid in advance are called prepaid income.
13. Expenses incurred but not yet paid just like electricity bills are is recorded as asset.
14. Withdrawals made by the owner decreases assets and increases equity.
15. Collection of accounts receivable decreases accounts receivable balance.
16. In recording, debit must be always equal to credit.
17. The book where transactions are recorded for the first time is general journal.
18. General journal is a three column book.
19. Recording is the same with bookkeeping
20. Accounts payable is an example of asset