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Under the transactions approach used in financial accounting, every transaction has a single effect upon each party engaging in it.

a. True
b. False

Sagot :

Anthougoidn

Answer:

Under the transactions approach used in financial accounting, every transaction has a single effect upon each party engaging in it.

b. False

Explanation:

Every transaction has double effect upon each party that is engaged in it.   Instead, a business records each transaction to show that it affects the accounting equation of assets = liabilities + equity.  This implies that every transaction that occurs must have an effect on the asset side and the liabilities + equity side.  While one account will be receiving value, another account will be giving out the value for the same transaction.  This effect helps to keep the equation in balance at all times.

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