Rudyard Accounting Chapter 3

Decrease

If an amount is recorded on the side of a T account opposite the normal balance side, will it increase or decrease?

Credit side

Increases in a revenue account (sales) are shown on which side of a T account?

False - Drawing is ALWAYS increased by debits.

T/F - A drawing account is decreased by debits and increased by credits.

True

T/F - A list of accounts used by a business is a chart of accounts.

False - A/P accounts are increased with a credit (liability)

T/F - Accounts payable accounts are increased with a debit.

True

T/F - Advertising Expense is increased with a debit.

True

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

False - Credit is on the right

T/F - An amount recorded on the left side of a T accounting is a credit.

False - Assets increase on the debit side.

T/F - Asset accounts increase on the credit side.

False - Cash is increased with a debit.

T/F - Cash is increased with a credit.

False - All withdrawals are recorded in the Drawing account.

T/F - Common accounting practice is to record withdrawals as debits directly in the owner's capital account.

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 - Each transaction changes the balances in the least two accounts.

True

T/F - Increases in expense accounts are recorded as debits because they decrease the owner's capital account.

False - Accounts increase on the side of the normal balance.

T/F - Increases to accounts are recorded on the debit side.

True

T/F - Prepaid Insurance is decreased with a credit.

True

T/F - The balance of an account increases on the same side as the normal balance side.

False - Credit always means right (debit is 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.

False - A/R accounts have a normal balance on the debit side (Asset)

T/F - The normal balance side of an accounts receivable account is a credit.

False - In the separate Drawing account

T/F - To summarize withdrawal information separately from the other records, owner withdrawal transactions are recorded in the owner's capital account.

True

T/F - When cash is paid for supplies, the supplies account is increased by a debit.

Credit Side

The right side of a T account is called what?

It is decreased by a debit.

When a business pays cash on account, how is the liability account decreased?

It is increased by a credit.

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

Debit side

The normal balance side of any expense account is which side?

Debit side

The normal balance side on an Asset account is which side?