The number of accounts on the chart of accounts is strictly limited. 2. Every account on the chart of accounts must be identified by one of the accounting elements 3. An account on the chart of accounts could be both a liability and a revenue. 4. The term prepaid is usually associated with an asset account. 5 . Unearned revenue would usually be listed in the asset section of a chart of accounts. 6. The FASB dictates to companies what their chart of accounts must look like. 7. The accounting equation stays in balance except when dealing with dividends. 8. Gains and losses are listed under retained earnings because they change the amount of retained earnings. 9. Paying cash for prepaid insurance will not change retained earnings. 10. Using electricity in June and receiving a bill from the electric company in June will result in an increase in assets during June. 11. Selling inventory for a price more than what was paid will increase retained earnings. 12. Amounts to be reported on the financial statement come from the accounting equation worksheet. 13. Accounts receivable at the end of 2020 would become the beginning balance for accounts receivable in 2021. 14. Cost of Goods Sold for the year 2020 would become the beginning balance for Cost of Goods Sold in 2021. Page //principlesoffinancialaccounting1.pressbooks.com/chapter/5-7-end-of-chapter-exercises/