Accounting I Chapter 2 Test

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

• True

• False

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

• True

• False

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

• True

• False

Accounts payable accounts are increased with a debit.

• True

• False

Accounts receivable accounts are increased with a debit.

• True

• False

All owner's equity accounts are increased on the credit side because the owner's capital account has a normal balance on the credit side.

• True

• False

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

• True

• False

Asset accounts increase on the credit side.

• True

• False

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

• True

• False

Cash is an asset account with a normal credit balance.

• True

• False