Accounting Chapter 2 Test

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

• TRUE
• FALSE

Each liability account has a normal debit balance.

• TRUE
• FALSE

Asset accounts decrease on the credit side.

• TRUE
• FALSE

Each transaction changes the balances in at least two accounts.

• TRUE
• FALSE

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

• TRUE
• FALSE

Increases in expense accounts are recorded as debits because they decrease the owner’scapital account.

• TRUE
• FALSE

The normal balance side of an Accounts Receivable account is a debit.

• TRUE
• FALSE

Utilities Expense is increased with a debit.

• TRUE
• FALSE

Cash is increased with a debit.

• TRUE
• FALSE

When an owner invests cash in a business, the owner’s capital account is

• a. increased by a debit.
• b. increased by a credit.
• c. decreased by a debit.
• d. decreased by a credit.