Which of the following statements is true?
A)Only the effects of internal transactions must be recognized and recorded in the accounting system.
B)An internal transaction represents a business activity between an entity and its environment.
C)Evidence used to record transactions affecting a business entity comes from source documents.
D)Only the effects of external events must be recognized, measured, and recorded in an entity's accounting system.

Question

Quizplus · Accepted Answer

Evidence used to record transactions affecting a business entity comes from source documents, such as invoices, receipts, and checks. Option A, B, and D are incorrect as they contain inaccurate information about internal and external transactions that should be recorded in the accounting system.

Which of the Following Statements Is True