Which of the following statements is true regarding simple and compound entries?
A) Simple entries can be prepared by anyone whereas compound entries need to be prepared by a skilled accountant.
B) Simple entries are recorded on the income statement whereas compound entries are recorded on the statement of financial position.
C) Simple entries involve one account, whereas compound entries involved 2 or more accounts.
D) An example of a compound entry would be the purchase of a machine for $400 cash and a $2,000 note payable.

Question

Quizplus · Accepted Answer

Compound entries involve more than two accounts, such as the example given where both cash and note payable accounts are affected by the purchase of a machine.

Which of the Following Statements Is True Regarding Simple and Compound