A recursive relationship is created when there is an employee ...

[kshipps]

A recursive relationship is created when there is an employee being supervised, and another employee is the supervisor.
  Indicate whether the statement is true or false

Question 2

State whether each of the following statements is true or false. Explain the true statements and discuss why the false statements are false. Use illustrations in your answer.
 
  a. An asset cannot be created by incurring a liability.
   b. One thing the accounting equation says is that assets are equal to the sources of the assets.
   c. If a transaction causes an asset to increase, another asset cannot simultaneously decrease.

[Sammyo]

Answer to Question 1

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Answer to Question 2

a. False. An asset can be created by incurring a liability. For example, buying merchandise on credit creates both an asset and a liability (amount owed to the supplier).
b. True. Assets = Liabilities plus equity. Assets arise, for example, from the creation of liabilities and from owner investments and net profits.
c. False. An asset can be used to acquire a different asset. For example, if cash were paid to purchase inventory, inventory would increase and cash would simultaneously decrease.