Ch. 2: Debits & Credits

The total of amounts on the left side of the accounting equation must always equal the total of amounts on the right side.

• True
• False

A record summarizing all the information pertaining to a single item in the accounting equation is known as a(n)

• transaction
• balance
• record
• account

An accounting device used to analyze transactions is called a(n)

• T account
• Calculator
• Record
• Ledger

In a T account, amounts recorded on the left side are called credits.

• True
• False

Accounts Payable keeps track of the amounts

• others owe to the business
• the business owes to others
• neither of these
• all of these are correct

The side of the account that is increased is called the

• Debit
• Credit
• Normal Balance
• Average Balance

The owner's capital account is on the right side of the accounting equation and has a normal credit balance.

• True
• False

Account balances increase on the normal balance side of an account.

• False
• True

A list of accounts used by a business is called a(n)

• list of accounts
• chart of accounts
• accounting record
• database

Accounts Receivable keeps track of the amounts

• a business owes to others
• customers owe to the business
• all of these are correct
• none of these