Rudyard Accounting Chapter 2 – Flashcards
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True
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T/F - An accounting device used to analyze transactions is a T account.
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False - debit means left
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T/F - An amount recorded on the left side of a T account is credit.
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True
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T/F - Each asset account has a normal debit balance.
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True
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T/F - Each liability account has a normal credit balance.
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True
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T/F - The balance of an account increases on the same side as the normal balance side.
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False - assets have a normal debit balance, so that's the side it increases on.
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T/F - Asset accounts increase on the credit side.
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True
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T/F - Each transaction changes the balances in at least two accounts.
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True
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T/F - A list of accounts used by a business is a chart of accounts.
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True
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T/F - When cash is paid for supplies, the supplies account is increased by a debit.
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False - as debits to the owner's Drawing account.
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T/F - Common accounting practice is to record withdrawals as debits directly into the owner's Capital account.
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False - debit means left
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T/F - The left side of an asset account is the credit side because asset accounts are on the left side of the accounting equation.
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True
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T/F - Increases in expense accounts are recorded as debits because they decrease the owner's Capital account.
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False - Accounts Receivable is an asset account, therefore it has a debit normal balance.
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T/F - The normal balance side of an Accounts Receivable account is a credit.
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False - Accounts Payable is a liability account, therefore it has a credit normal balance.
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T/F - Accounts Payable accounts are increase with a debit.
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True
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T/F - Advertising Expense is increased with a debit.
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False - Cash is an asset, therefore it is increased with a debit.
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T/F - Cash is increased with a credit.
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True
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T/F - Prepaid Insurance is decreased with a credit.
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False - They are recorded in the owner's Drawing account.
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T/F - To summarize withdrawal information separately from the other records, owner withdrawal transactions are recorded in the owner's Capital account.
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False - on the credit side.
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T/F - Increases to liability accounts are recorded on the debit side.
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Credit side
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The right side of a T account is the debit or credit side?
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Decreased
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If an amount is recorded on the side of a T account opposite the normal balance side the account balance is increased or decreased?
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Debit
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The normal balance side of an asset account is a debit or credit?
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Credit
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When the owner invests cash in a business, the owner's Capital account is increased with what? (debit or credit)
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Debit
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When a business pays cash on account, a liability account is decreased with what? (debit or credit)
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A separate revenue account (not the owner's capital account.)
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When cash is received from sales, the change in owner's equity is usually recorded where?
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Accounts Receivable is decreased with a credit and Cash is increased with a debit.
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When money is received on account which accounts are affected and are those accounts debited or credited?
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Debit side
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The normal balance side of any expenses account is what?
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Credit side
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Increases in a revenue account are shown on which side of a T account?
