Accounting Chapter 4

Credits are entered on the left side of the T chart.

• True

• False

Debits are always on the left side of the T Chart.

• True

• False

A credit to an account always increases it; a debit to an account always decreases it.

• True

• False

An asset account appears on the right side of the accounting equation and is also increased on the right side of its T account.

• True

• False

The payment of a liability is recorded by a debit to the liability account and a credit to the owner’s capital account.

• True

• False

A business groups its accounts in a ledger.

• True

• False

A chart of accounts is limited to 50 accounts.

• True

• False

The difference between the debit and credit amounts in an account is the account balance.

• True

• False

The normal balance for asset account is a ________.

• credit

• debit

The normal balance for the owner’s capital account is a ____________.

• credit

• debit