Chapter 2 Analyzing Transactions

Chapter 2.1

Using T Accounts

Multiple Choice

Credit means

• increase

• decrease

• left

• right

Multiple Choice

Debit means

• increase

• decrease

• left

• right

Multiple Choice

Each liability account has a normal debit balance.

• TRUE
• FALSE

Multiple Choice

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

• TRUE
• FALSE

Multiple Choice

Asset accounts decrease on the credit side.

• TRUE
• FALSE

Multiple Choice

A T account is a device used to analyze transactions in accounting.

• False
• True

Multiple Choice

Mikaela Mundt invested $2,000.00 of her own money in the business. Receipt No. 1. What two accounts are affected?

• Cash and Insurance
• Cash and Prepaid Insurance
• Cash and Mikaela Mundt, Investment
• Cash and Mikaela Mundt, Capital

Multiple Choice

Used business cash to purchase supplies costing $216.00. Wrote Check No. 1. This transaction increases and decreases assets.

• False
• True

Multiple Choice

 What two accounts are involved when you receive cash from owner as an investment?

• cash and capital
• cash and investment
• cash and owner's equity
• cash and supplies

Multiple Choice

 Buying supplies on account creates a receivable.

• False
• True

Multiple Choice

The normal balance side of an asset account is.

• debit

• credit

• normal balance

Multiple Choice

 Paying cash for insurance increases and decreases an asset.

• False 
• True

Multiple Choice

Each asset account has a normal debit balance.

• true

• false

Multiple Choice

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

• true

• false

Multiple Choice

The sales account is NEVER...

• debited

• credited

Multiple Choice

The normal balance side of an expense or drawing account.

• debit

• credit

• normal balance

Multiple Choice

A withdrawl decreases owner's equity

• False
• True