A Compound Journal Entry Affects No More Than Two Accounts

question 168

True/False

A compound journal entry affects no more than two accounts.

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Definitions:

Total Assets

Represents the sum of everything of value owned by a company, including cash, investments, property, and equipment.

Sales

The exchange of goods or services for money, representing the primary source of revenue for most businesses.

Fixed Asset Account

A financial account that tracks the cost and depreciation of assets a company uses over a long period.

Pro Forma Statement

An estimation or projection of future financial performance based on a company's current financial position and expected future transactions.