The basic accounting equation is: Assets = Liabilities + Owner's Equity, True, An increase in an asset account is recorded on the Credit side, False, The General Journal is known as the book of original entry, True, Drawing reduces the Owner's Equity of a business, True, The Income Statement shows the financial position of a business on a specific date, False, A Trial Balance proves that no errors were made in recording business transactions, False, Purchasing equipment on credit increases both Assets and Liabilities, True, Revenues increase Owner’s Equity, while Expenses decrease Owner’s Equity, True, Depreciation is the allocation of the cost of a fixed asset over its useful life, True, Prepaid Rent is classified as a Liability account in the balance sheet, False, An Outstanding Check (Unpresented Check) is added to the bank statement balance during bank reconciliation, False, Accrued Revenues represent cash received before services are performed, False, Straight-Line Method calculates equal annual depreciation expense for each year of an asset's useful life, True, When writing off an uncollectible account under the Allowance Method, the Bad Debts Expense account is debited, False, Bank Service Charges are deducted from the Cash Book balance during Bank Reconciliation, True, Accumulated Depreciation is a contra-asset account with a normal debit balance, False

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