The Accounting Cycle

Assets are increased by debits and liabilities are decreased by credits. True False

• True

• False

The owner's capital account is increased by credits. True False

• True

• False

An account will have a credit balance if the total debit amounts exceed the total credit amounts. True False

• True

• False

The ledger is the entire group of accounts and is referred to as the book of original entry. True False

• True

• False

The basic steps in the recording process are (1) to analyse each transaction, (2) to enter the transaction in a journal, and (3) to transfer the journal entry to the appropriate ledger accounts. True False

• True

• False

The posting phase of the recording process makes it possible to accumulate the effects of journalized transactions in individual accounts. True False

• True

• False

Assets = liabilities + owner's capital - drawings + revenues -expenses is a correct form of the expanded basic accounting equation. True False

• True

• False