Final answer:
True, the principles of cash basis accounting are generally the same across different enterprises. T-accounts are used to represent a firm's assets and liabilities along with net worth, ensuring that total assets always equal liabilities plus net worth.
Step-by-step explanation:
The student's question pertains to the application of accounting principles, specifically within the context of the cash basis method. The correct answer to the question is a) True. While specific accounting challenges may vary from one enterprise to another, the fundamental principles of accounting on a cash basis remain consistent across different types of businesses. In cash basis accounting, revenues and expenses are recognized when cash is received or paid, respectively, rather than when the earnings process is complete or the obligation is incurred, which is characteristic of accrual basis accounting.
In terms of learning about T-accounts, a key concept in accounting, the T-account is a tool used for visualizing the effect of transactions on an entity's accounts. The 'T' shape separates a firm's assets on the left from its liabilities on the right. Additionally, the net worth, also known as equity, is considered on the liabilities side to ensure the account balances. It is essential to understand that for any business, including a bank, the basic equation on which the T-account is founded is Assets = Liabilities + Net Worth. A positive net worth indicates a healthy business, while a negative net worth is indicative of insolvency or bankruptcy.