To Determine the Economic Effect of a Transaction on the Entity

question 89

True/False

To determine the economic effect of a transaction on the entity in terms of its accounting equation,each transaction is analyzed as to the accounts (at least two)that are affected.

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Definitions:

Revised Act

An updated version of a law that has been amended or rewritten for clarification, modernization, or other legislative reasons.

Incorporator

The individual or entity responsible for filing the formal documents needed to legally form a corporation.

Subchapter S

A section of the United States tax code that allows for a corporation's income to be taxed directly to the shareholders, thus avoiding double taxation.

Internal Revenue Code

The statutory collection of domestic tax laws that govern federal tax administration in the United States.