Chapter 4- Transactions that affect Assets, Liabilities, and Owner's Capital

___ requires that more than one account is affected by each transaction

Double- entry accounting

A credit to an account always increases it; a debit to an account always decreases it.

False

An asset account appears on the right side of the accounting equation and is also increased on the right side of its T account

False

The payment of a liability is recorded by a debit to the liability account and a credit to the owner's capital account.

False

The top of the T account is used for account titles. Credits are entered on the left side of the T; debits, on the right.

False

An account's ____ is always on the increase side of an account

Normal balance

A ____ is a tool used to analyze a business transaction's effect on an account

T-account

A business transaction can affect two accounts on the same side of the accounting equation and still leave the equation in balance

True

Debit and credit rules for accounts on one side of the accounting equation are mirror images of those on the other side.

True

Every transaction affects two or more accounts and is recorded by equal amounts of debits and credits.

True

The difference between the debit and credit amounts in an account is the account balance

True

An amount entered on the right side of an account is a(n) ____.

credit

The normal balance for the owner's capital account is a

Credit

The ___ is an "official" list of all the accounts used by a business to record its transactions

Chart of accounts

A decrease in an asset account is recorded as a

Credit

A decrease in the owner's capital is recorded as

Debit

A decrease to accounts payable is a

Debit

The amount entered on the left side of an account is the ____.

Debit

The normal balance for accounts receivable is

Debit

The normal balance for an asset account is a

Debit

an increase to office furniture is a

Debit