regarding the relationships of revenues and expenses to assets and liabilities, state whether each of the…

regarding the relationships of revenues and expenses to assets and liabilities, state whether each of the following statements is true or false.\na) recording an increase in a revenue account may be associated with a decrease in assets. true\n b) recording an increase in a revenue account may be associated with a decrease in liabilities. false\n c) recording a decrease in assets may be associated with an increase in an expense account. false\n d) a decrease in supplies will be accompanied by an increase in supplies expense. true

regarding the relationships of revenues and expenses to assets and liabilities, state whether each of the following statements is true or false.\na) recording an increase in a revenue account may be associated with a decrease in assets. true\n b) recording an increase in a revenue account may be associated with a decrease in liabilities. false\n c) recording a decrease in assets may be associated with an increase in an expense account. false\n d) a decrease in supplies will be accompanied by an increase in supplies expense. true

Answer

Brief Explanations:

  • a) Recording revenue usually increases assets (e.g., cash or accounts - receivable), not decreases them, so it's false.
  • b) An increase in revenue can be associated with a decrease in liabilities (e.g., unearned revenue becoming earned), so it's true.
  • c) A decrease in assets can be associated with an increase in an expense account (e.g., using up supplies), so it's true.
  • d) When supplies are used (decrease in supplies), it leads to an increase in supplies expense, so it's true.

Answer:

a) False b) True c) True d) True