Instructions: Write T if the statement is correct. Write F if it is incorrect.

________1. Economic transactions and events are initially recorded in the general ledger.________2. If a given account has debit in excess of credit, then the account would always possess a debit balance.________3. The matching principle requires that expenses be recognized in the same period as the revenue they helped to produce.________4. Accounting measures and records all events and activities of a business.________5. The income statement reflects revenues and expenses for one point in time.________6. Assets minus owner’s equity equal liabilities.________7. The trial balance is not a formal statement.________8. The normal balance of an account is the side of the account where decreases are recorded.________9. A trial balance with equal debit and credit totals does not always mean that the accounting process was free from error.________10. The periodicity concept assumption holds that an organization’s life must be divided into accounting periods.

Instructions: Supply what is asked in the problem.

Aldub Heating and Aircon Inc. installed a 900,000 heating system for one of its clients. The client paid 1/3 down and promised to pay the balance in 60 days. Because of this transaction:

1. Total Assets would increase by __________2. Total Liabilities would increase by __________3. Total Owner’s equity would increase by __________