Chapter 2 Accounting

A drawing account is decreased by debits and increased by credits.

False

Accounts payable accounts are increased with a debit.

False

An amount recorded on the left side of a T account is a credit.

False

Asset accounts increase on the credit side

False

Cash is increased with a credit.

False

Increases to liability accounts are recorded on the debit side.

False

The left side of an asset account is the credit side because asset accounts are on the left side of the accounting equation.

False

The normal balance of an accounts receivable account is a credit.

False

To summarize withdrawal information separately from the other records, owner withdrawal transactions are recorded in the owner's capital account.

False

Advertising Expense is increased with a debit.

True

An accounting device used to analyze transactions is a T account.

True

Each asset account has a normal debit balance

True

Each liability account has a normal credit balance

True

Each transaction changes the balances in at least two accounts.

True

Increases in expense accounts are recorded as debits because they decrease the owner's capital account.

True

Prepaid Insurance is decreased with a credit

True

The balance of an account increases on the same side as the normal balance side.

True

When cash is paid for supplies, the supplies account is increased by a debit.

True

If an amount is recorded on the side of a T account opposite the normal balance side, the account balance is....

decreased

When a business pays cash on account, a liability account is

decreased by a debit

When the owner invests cash in a business, the owner's capital account is

increased by a credit

The normal balance of any expense account is the

debit side

The normal balance side of an asset account is the

debit side

Increases in a revenue account are shown on a T account's

credit side

The right side of the T account is the...

credit side