1. The formula for the basic accounting equation is

OWNER'S EQUITY = TOTAL ASSETS + TOTAL LIABILITIES.

TOTAL ASSETS = TOTAL LIABILITIES - OWNER'S EQUITY.

TOTAL ASSETS = TOTAL LIABILITIES + OWNER'S EQUITY.

OWNER'S EQUITY = TOTAL LIABILITIES - TOTAL ASSETS.

TOTAL LIABILITIES = TOTAL ASSETS + OWNER'S EQUITY.

2. An increase in accounts receivable from last year's balance sheet to this year's balance sheet indicates that the business experienced a cash outflow.

True

False