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