Accounting Chapter 2

1) Which accounts are affected? 2) How are those two accounts classified? 3) How do you change those classifications? 4) How do you enter the amount into the account?

Steps for analyzing a transaction into its debit and credit parts (4)...

True

True or False: Debits and credits should equal each other.

1) account balances increase on the normal balance side of an account 2) account balances decrease on the side opposite the normal balance side of an account

What are the two basic accounting rules that regulate increases and decreases of account balances?

Debit

What is an amount recorded on the left side of a T account?

Credit

What is an amount recorded on the right side of a T account?

Credit Side

What is the normal balance side of an owner's capital account?

Debit Side

What is the normal balance side of any asset account?

Credit side

What is the normal balance side of any liability account?

Debit side

What side are the decreases in a liability account shown on a T account?

for each transaction

What side are the decreases in an asset account shown on a T account?

Credit side

What side are the increases in a revenue account shown on a T account?

Credit side

What side are the increases in an asset account shown on a T account?

Right side

What side are the values of all equities or liabilities on?

Left side

What side are the values of all things owned (assets) on?

Debit Side

What side is the normal balance of an owner's drawing account?

Debit Side

What side is the normal balance of any expense account on?

Credit side

What side is the normal balance of any revenue account on?

T-Account

accounting device used to analyze transactions

Debit

amount recorded on left side

Credit

amount recorded on right side

Chart of Accounts

list of accounts used by a business

Normal Balance

side on which the account increases