Accting 1 Normal Balance

Front

Debit means

Back

left

Answer explanation

In accounting, 'debit' refers to the left side of a ledger account. It is used to record an increase in assets or a decrease in liabilities and equity. The term 'debit' does not mean increase, decrease, or right. Therefore, the correct choice is 'left'.

Front

The normal balance side of the account is the side that increases the balance

Back

true

Answer explanation

The normal balance side of an account is indeed the side that increases the balance. This is because the normal balance side is the side where increases are recorded, while the opposite side records decreases. Therefore, the statement in the question is true.

Front

Cash is classified as a liability

Back

false

Answer explanation

Cash is not classified as a liability; it is considered an asset. Assets are resources owned by a company that have economic value and can be used to generate revenue or pay off liabilities. Liabilities, on the other hand, represent a company's financial obligations or debts. Therefore, the correct answer is false.

Front

A liability is something you own

Back

false

Answer explanation

A liability is not something you own; rather, it is something you owe. Liabilities are financial obligations or debts that a company or individual has to pay. The correct answer is 'false' because the statement in the question is incorrect.

Front

The sales account has a

Back

credit normal balance

Answer explanation

The sales account has a credit normal balance because it is a revenue account. In accounting, revenue accounts typically have a credit balance, while expense and asset accounts have a debit balance. Therefore, the correct choice is a credit normal balance.

Front

What is this called: debit, credit, T account, General Journal?

Back

T account

Answer explanation

The question asks what the term is for a specific accounting concept. The correct choice is 'T account', which is a visual representation of a general ledger account, showing debits on the left and credits on the right. The other options, 'debit', 'credit', and 'General Journal', are related to accounting but do not fit the context of the question.

Front

Cash has a normal balance of a

Back

debit

Answer explanation

Cash has a normal balance of a debit because it represents an asset. In accounting, assets increase with debits and decrease with credits. Therefore, when cash is added, it is recorded as a debit, and when cash is removed, it is recorded as a credit.

Front

Sales has a normal balance of

Back

credit

Answer explanation

Sales has a normal balance of credit. In accounting, revenues such as sales are recorded as credits because they increase the company's equity. When a sale is made, the sales account is credited, reflecting an increase in revenue and the company's financial position.

Front

An expense has a normal balance of

Back

debit

Answer explanation

An expense has a normal balance of debit. In accounting, expenses are recorded as debits because they increase the expense accounts. When an expense is incurred, the expense account is debited, and the corresponding liability or equity account is credited.

Front

Accounts Receivable has a normal balance of

Back

debit

Answer explanation

Accounts Receivable is an asset account that represents the money owed to a business by its customers. In accounting, assets have a normal debit balance. Therefore, the correct choice is debit, as it increases the value of the Accounts Receivable account when customers owe more money to the business.