Accounting Chapter 2

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

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

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Each asset account has a normal credit balance.

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Each liability account has a normal debit balance.

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• FALSE

The balance of an account increases on the same side as the normal balance side.

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Asset accounts decrease on the credit side.

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Each transaction changes the balances in at least two accounts.

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A list of accounts used by a business is a chart of accounts.

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• False

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

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Common accounting practice is to record withdrawals as debits directly in the owner’s capital account.

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