Accounting Chapter 5

Front

Liability, expense, and capital resources all have normal credit balances.

Back

False

Front

Expenses decrease owner’s equity and are recorded as debits.

Back

True

Front

The rules of debit and credit for expense accounts are the same rules for asset accounts.

Back

True

Front

A business should have separate accounts for recording revenue and expenses.

Back

True

Front

Liability, revenue, and withdrawal accounts all have normal credit balances.

Back

False

Front

The withdrawal of cash by the owner of a business decreases owner’s equity.

Back

True

Front

Expenses have the opposite effect from revenue on the capital account.

Back

True

Front

Permanent accounts start each accounting period with a zero balance.

Back

False

Answer explanation

Temporary Accounts do not Permanent Accounts

Front

Temporary capital accounts are extensions of the owner’s capital account.

Back

True

Front

The normal balance for a expense account is a ______________.

Back

Debit