Question

[10 mark] 1.2 Answer true or false to the following statements Answer true or false to the following statements 1.2.1. Liabilities should be equal assets minus owner's equity 1.2.2. Businesses that sell on credit do not make any profit 12.3. Receipts from debtors are recorded in the cash payment journal. 1.2.4. The Trial Balance is the final summary of transactions or balances that a company compiles 1.2.5. OE is the abbreviation used in accounting when referring to owner's Equity.​

Answer 1

1.2.1. False - Liabilities should be subtracted from assets to determine owner's equity.

1.2.2. False - Businesses can make a profit even if they sell on credit.

1.2.3. False - Receipts from debtors are recorded in the cash receipts journal.

1.2.4. True - The Trial Balance is a summary of all the accounts and their balances in the ledger.

1.2.5. True - OE is commonly used as an abbreviation for owner's equity in accounting.