Final answer:
The statement is true; recording a sale that increases assets (accounts receivable) and revenues (an equity account) is a standard accounting practice reflected in T-accounts, where assets must equal liabilities plus net worth.
Step-by-step explanation:
The statement '1st entry is to record the sale at retail that increases assets, mainly accounts receivable, and increases revenues, an equity account' is true. When a company makes a sale on credit, it records the transaction by increasing its accounts receivable, which is an asset representing the money owed by customers. This entry also increases the company's revenues, which gets reported under equity as part of the owner's equity or shareholders' equity depending on the business structure. This is because revenues contribute to the net income, which ultimately increases the net worth of the company.
In accounting, such transactions are recorded in a T-account, which visually separates a company's assets from its liabilities. For example, when Singleton Bank lends money, such as the $9 million loan to Hank's Auto Supply, the loan is recorded as an asset because it will generate interest income. On the other side of the T-account, the bank owes the deposited funds to its depositors, which are recorded as liabilities. The difference between total assets and total liabilities is the net worth of the bank.