Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded in a journal.

Question

Quizplus · Accepted Answer

This statement is true. Before a transaction can be recorded in a journal, its impact on the relevant accounts must be analyzed to ensure that the accounting equation remains in balance. This analysis involves identifying which accounts are affected and whether their balances will increase or decrease as a result of the transaction.

Each Transaction Must Be Analyzed in Terms of Its Effect