The Rules for Recording Accounting Transactions Include All of the Following

question 151

Multiple Choice

The rules for recording accounting transactions include all of the following EXCEPT:

• A) Every transaction's net amount on the left side of the equation must equal the net amount on the right side of the equation.
• B) Total assets must always equal total liabilities plus total equity.
• C) Every transaction affects the financial statements of the business.
• D) Both sides of the accounting equation must be affected.

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Definitions:

Government Backing

Support or endorsement from a government body, often through policies, subsidies, or direct financial aid.

Gold Standard

A currency where the value is determined by the ability to trade it for a specified amount of gold (i.e., $1 for 1/35 of an ounce) at a government-approved bank.

Currency Value

The worth of a currency in terms of the amount of goods or services that one unit of the currency can purchase.

Government-Approved Bank

A financial institution that has received official authorization from the government to operate within certain regulatory standards.