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Indicate Whether Each of the Following Statements Regarding the Four

Question 49

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Indicate whether each of the following statements regarding the four types of accounting events is true or false.

Premises:
Some claims exchange transactions involve an increase in a liability account and a decrease in an equity account.
An asset use transaction cannot result in an increase in equity.
Asset exchange transactions involve an increase in one asset and a decrease in another asset.
An asset source transaction involves an increase in assets and an increase in a corresponding claims account.
Asset exchange transactions cannot affect cash flows.
Responses:
True
False

Correct Answer:

Some claims exchange transactions involve an increase in a liability account and a decrease in an equity account.
An asset use transaction cannot result in an increase in equity.
Asset exchange transactions involve an increase in one asset and a decrease in another asset.
An asset source transaction involves an increase in assets and an increase in a corresponding claims account.
Asset exchange transactions cannot affect cash flows.
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