Chapter 2: Analyzing the Effect of Transactions

The left side of a T account is the (A) debit side. (B) credit side. (C) normal balance side. (D) equity side.

(A) debit side

The normal balance side of any expense account is the (A) debit side. (B) credit side. (C) right side. (D) none of these.

(A) debit side.

When a business pays for insurance, Prepaid Insurance is (A) increased by a debit. (B) increased by a credit. (C) decreased by a debit. (D) decreased by a credit.

(A) increased by a debit

When the owner withdraws cash, the owner's drawing account is (A) increased by a debit. (B) increased by a credit. (C) decreased by a debit. (D) decreased by a credit.

(A) increased by a debit

When cash is paid for advertising, Advertising Expense is (A) increased by a debit. (B) increased by a credit. (C) decreased by a debit. (D) decreased by a credit.

(A) increased by a debit.

The normal balance side of a liability account is the (A) debit side. (B) credit side. (C) left side. (D) none of these.

(B) credit side.

When a business receives revenue, Sales is (A) increased by a debit. (B) increased by a credit. (C) decreased by a debit. (D) decreased by a credit.

(B) increased by a credit.

When $1,500 cash is received on account, (A) Sales is increased with a credit and Cash is increased with a credit. (B) Accounts Receivable is increased with a debit and Cash is increased with a credit. (C) Accounts Receivable is decreased with a credit and Cash is increased with a debit. (D) Accounts Receivable is decreased with a debit and Cash is increased with a debit.

(C) Accounts Receivable is decreased with a credit and Cash is increased with a debit.

When services are sold for $500 cash, (A) Sales is decreased with a debit and an Accounts Receivable account is increased with a credit. (B) Sales is increased with a debit and Cash is increased with a credit. (C) Sales is increased with a credit and an Accounts Receivable account is increased with a debit. (D) Sales is increased with a credit and Cash is increased with a debit.

(D) Sales is increased with a credit and Cash is increased with a debit.