Accounting I - Chapter 2

All accounting transactions are recorded in the accounting equation.

• True

• False

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

• transaction

• balance

• record

• account

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

• True

• False

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

• True

• False

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

• list

• chart of accounts

• accounting record

• databse

Every transaction must affect accounts on both sides of the accounting equation.

• True

• False

A business paid cash for supplies. How is the transaction recorded?

• debit cash, debit supplies

• credit cash, credit supplies

• debit cash, credit supplies

• credit cash, debit supplies

A business sold services on account. How is this transaction recorded?

• debit accounts receivable, debit sales

• credit accounts receivable, credit sales

• debit accounts receivable, credit sales

• credit accounts receivable, debit sales

A business paid cash on account. This transaction is recorded by debiting cash and crediting accounts payable.

• True

• False

A business paid cash for insurance. How is this transaction recorded?

• credit cash, debit insurance

• debit cash, credit insurance

• credit accounts payable, debit insurance

• debit accounts payable, credit insurance