Each Entry in the Journal Affects Two or More Accounts

question 50

True/False

Each entry in the journal affects two or more accounts.

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Definitions:

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, representing how much of the asset's value has been used up.

Indirect Method

The indirect method is an approach used in cash flow statements to adjust net income for the changes in non-cash accounts to calculate cash flow from operating activities.

Net Income

Represents the earnings of a company after subtracting all costs and expenses from total revenue, indicating the company's financial health.

Accrued Liabilities

Expenses that have been incurred but have not been paid at the end of the accounting period.