Rudyard Accounting Chapter 2

Flashcard maker : Lily Taylor
True
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.
True
T/F – Each asset account has a normal debit balance.
True
T/F – Each liability account has a normal credit balance.
True
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.
True
T/F – Each transaction changes the balances in at least two accounts.
True
T/F – A list of accounts used by a business is a chart of accounts.
True
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.
True
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.
True
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.
True
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.
Credit side
The right side of a T account is the debit or credit side?
Decreased
If an amount is recorded on the side of a T account opposite the normal balance side the account balance is increased or decreased?
Debit
The normal balance side of an asset account is a debit or credit?
Credit
When the owner invests cash in a business, the owner’s Capital account is increased with what? (debit or credit)
Debit
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?
Debit side
The normal balance side of any expenses account is what?
Credit side
Increases in a revenue account are shown on which side of a T account?

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