Accounting Chapter 2

Businesses use accounts to summarize all the information pertaining to a single item.

• True

• False

A drawing account is increased by debits and decreased by credits.

• True

• False

Answer explanation

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

• True

• False

Accounts Payable accounts are increased with a credit

• True

• False

Answer explanation

Accounts Receivable accounts are increased with a credit.

• True

• False

Answer explanation

The owner's equity account is increased on the debit side because the owner's capital account has a normal balance on the debit side.

• True

• False

Answer explanation

An amount recorded on the left side of a T account is a credit.

• True

• False

Answer explanation

Asset accounts decrease on the debit side

• True

• False

Answer explanation

Before a transaction is recorded in the records of a business, it is analyzed to determine which accounts are changed and how.

• True

• False

Answer explanation

Cash is an asset account with a normal credit balance

• True

• False

Answer explanation