27.If equipment were purchased from an outside party, the using up of the equipment's economic benefit would be considered an external transaction. *

True

False

28.Asset, liability and revenue accounts are not closed as long as a company continues in business. *

True

False

29.After posting the entries to close all revenue accounts and all expense accounts, the Income Summary account of Waif Services has a $4,000 debit balance. This shows that Waif Services earned profit of $4,000. *

True

False

30.The chart of accounts is a list of all the accounts used by a company. *

True

False

31.Both the accrual basis and the cash basis of accounting increase the comparability of financial statement information from period to period. *

True

False

32.Since the revenue recognition principle requires that revenues be earned, there is no such thing as unearned revenues in accounting. *

True

False

33.Increases in liabilities are recorded as debits. *

True

False

34.External users include lenders such as banks, and other creditors such as suppliers and bondholders. *

True

False

35.Because they decrease equity, withdrawals made by a business owner are credited to his/her Withdrawals account. *

True

False

36.The accounting equation can be expressed as liabilities = assets - equity. *

True

False

37.Income Summary is a temporary account. *

True

False

38The matching principle requires that revenue be assigned to the accounting period in which it is earned. *

True

False

39.Internal controls include procedures to protect assets and prevent fraud. *

True false

40.Although a proprietorship is not a separate legal entity, a partnership is. *

True

False