Accounting 1 Semester Test 1st

Front

The accounting equation is most often stated as Assets + Liabilities = Owner's Equity.

Back

False

Front

When two asset accounts are changed in a transaction, there must be an increase and a decrease.

Back

True

Front

A transaction for the sale of goods or services results in a decrease in owner's equity.

Back

False

Front

An expense is a decrease in owner's equity resulting from the operation of a business.

Back

True

Front

Payments for advertising, equipment repairs, utilities, and rent are liabilities.

Back

False

Front

Withdrawals are assets taken out of a business for the owner's personal use.

Back

True

Front

An amount recorded on the right side of a T account is a debit.

Back

False

Front

Each asset account has a normal credit balance.

Back

False

Front

Each liability account has a normal debit balance.

Back

False

Front

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

Back

False