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