accounting ch.4 – Flashcards
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a __ is a tool used by accountants to analyze business transactions.
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T account
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the __ of an account is the same side used to increase the account
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balance side
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the left side on the T account is the __ side
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debit
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assets = liabilities + owners equity is the __
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accounting equation
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the __ side is the right side of the T account
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credit
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__ is the financial record keeping system in which each business transaction affects at least two accounts
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double- entry accounting
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a __ is a list of all the accounts a business uses
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chart of accounts
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accounts are grouped together in a __
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ledger
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each account has a specific side that is its normal balance side (t/f)
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true
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every business transaction affects at least two accounts that are on different sides of the basic accounting equation (t/f)
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false
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for every debit entry made in one account, a credit entry must be made in another account (t/f)
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true
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the T account is an inefficient method for analyzing many business transactions (t/f)
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false
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double-entry accounting is the recordkeeping system in which each business transaction affects at least one account (t/f)
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false
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"debit" means to increase an account balance (t/f)
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false
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the normal balance side of an account is the same side that is used to record increases to the account (t/f)
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true
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liability and capital accounts are increased on the debit side (t/f)
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false
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debits and credits are used to record increases and decreases in each account affected by a business transaction (t/f)
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true
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asset accounts are increased on the credit side (t/f)
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false
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a credit is an amount entered on the right side on the T account (t/f)
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true
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if the accounting equation in not in balance after a transaction has been recorded, one reason may be that the debit or credit part of the transaction was not recorded (t/f)
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true
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when analyzing business transactions, you should ask yourself which accounts are affected (t/f)
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true
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a credit to an asset account will decrease the account, while a credit to a liability account will increase that account (t/f)
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true
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the normal side of an owners capital account is the debit side (t/f)
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false
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if one assets account is debited for $75 and a different asset account is credited $75, the total assets will increase by $75 (t/f)
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false
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the normal balance side for an asset is the debit side (t/f)
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true
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"debit" means the increase side of an account (t/f)
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false
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a credit to a liability account decreases the account balance (t/f)
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false
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assets are increased on the debit side (t/f)
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true
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capital is increased on the credit side (t/f)
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true
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liabilities are decreased on the credit side (t/f)
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false
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the basic accounting equation may be expressed as A - L = OE (t/f)
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true
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the right side of a T account is always the debit side (t/f)
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false
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for every debit there must be an equal credit (t/f)
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true
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a debit to one asset account and a credit to another asset account will result in the basic accounting equation being out of balance (t/f)
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false
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the left side of a T account is always the credit side (t/f)
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false
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credit means to decrease a liability (t/f)
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false
