Financial Accounting Chapter 2 The Recording Process

A new account is opened for each transaction entered into by a business firm

• True

• False

The recording process becomes more efficient and informative if all transactions are recorded in one account.

• True

• False

When the volume of transactions is large, recording them in tabular form is more efficient than using journals and ledgers.

• True

• False

An account is often referred to as a T-account because of the way it is constructed.

• True

• False

A debit to an account indicates an increase in that account.

• True

• False

If a revenue account is credited, the revenue account is increased.

• True

• False

The normal balance of all accounts is a debit.

• True

• False

Debit and credit can be interpreted to mean increase and decrease, respectively.

• True

• False

The double-entry system of accounting refers to the placement of a double line at the end of a column of figures.

• True

• False

A credit balance in a liability account indicates that an error in recording has occurred.

• True

• False