True/False
Indicate whether the statement is true or false.
____ 1. Businesses use accounts to summarize all the information pertaining to a single item.
____ 2. An accounting device used to analyze transactions is a T account.
____ 3. An amount recorded on the left side of a T account is a credit.
____ 4. The normal balance side of an asset account is based on the location of the account in the accounting equation.
____ 5. Each asset account has a normal debit balance.
____ 6. Each liability account has a normal credit balance.
____ 7. The balance of an account increases on the same side as the normal balance side.
____ 8. The balance of an account decreases on the side opposite the normal balance side.
____ 9. Asset accounts increase on the credit side.
____ 10. Before a transaction is recorded in the records of a business, it is analyzed to determine which accounts are changed and how.
____ 11. Each transaction changes the balances in at least two accounts.
____ 12. A list of accounts used by a business is a chart of accounts.
____ 13. Cash is an asset account with a normal credit balance.
____ 14. Capital is an owner's equity account with a normal debit balance.
____ 15. When cash is paid for supplies, the supplies account is increased by a debit.
____ 16. Common accounting practice is to record withdrawals as debits directly in the owner's capital account.
____ 17. The balance of a drawing account represents the total value of assets taken out of a business by the owner.
____ 18. The left side of a liability account is the normal balance side because liabilities are on the left side of the accounting equation.
____ 19. The left side of an asset account is the credit side because assets accounts are on the left side of the accounting equation.
____ 20. A drawing account is decreased by debits and increased by credits.
____ 21. The total debits and credits for a transaction do not have to equal.
____ 22. Increases in expense accounts are recorded directly in the owner's capital account.
____ 23. Increases in expense accounts are recorded as debits because they decrease the owner's capital account.
____ 24. Increases in revenue accounts are recorded as debits because they increase the owner's capital account.
____ 25. The normal balance side of an accounts receivable account is a credit.
____ 26. The normal balance side of an accounts payable account is a credit.
____ 27. Accounts receivable accounts are increased with a debit.

____ 28. Accounts payable accounts are increased with a debit.
____ 29. Advertising Expense is increased with a debit.
____ 30. Cash is increased with a credit.
____ 31. Christine Jones, Drawing is increased with a credit.
____ 32. Christine Jones, Drawing is decreased with a credit.
____ 33. Accounts Receivable (Zwilling Company) is increased with a debit.
____ 34. Prepaid Insurance is decreased with a credit.
____ 35. To summarize withdrawal information separately from the other records, owner withdrawal transactions are recorded in the owner's capital account.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____ 36. A record summarizing all the information pertaining to a single item in the accounting equation is ____. a. a debit b. a credit c. an account d. a T account
____ 37. In a T account, the debit side is ____. a. the left side b. the right side c. both A and B d. neither A nor B
____ 38. The right side of a T account is the ____. a. debit side b. credit side c. normal balance side d. equity side
____ 39. If an amount is recorded on the side of a T account opposite the normal balance side, the account balance is
____. a. increased b. decreased c. unaffected d. correct
____ 40. The normal balance side of an asset account is the ____. a. debit side c. decrease side b. credit side d. right side
____ 41. When the owner invests cash in a business, the owner's capital account is ____. a. increased by a debit c. decreased by a debit b. increased by a credit d. decreased by a credit
____ 42. When a business pays for insurance, Prepaid Insurance is ____. a. increased by a debit c. decreased by a debit b. increased by a credit d. decreased by a credit
____ 43. When a business buys an asset on one date and agrees to pay on a later date, the transaction is ____. a. delayed c. increased b. on account d. none of the above
____ 44. When a business pays cash on account, a liability account is ____. a. increased by a debit b. increased by a credit c. decreased by a debit d. decreased by a credit
____ 45. When cash is received from sales, the change in the owner's equity is usually ____. a. recorded in a separate revenue account b. recorded directly in the owner's capital account

c. recorded as interest revenue d. always recorded on the debit side
____ 46. When a business receives revenue, Sales is ____. a. increased by a debit c. decreased by a debit b. increased by a credit d. decreased by a credit
____ 47. The amount paid for rent is recorded as a debit to ____. a. Miscellaneous Expense c. Supplies b. Rent Expense d. Cash
____ 48. When cash is paid for rent, Rent Expense is ____. a. increased by a debit c. decreased by a debit b. increased by a credit d. decreased by a credit
____ 49. When the owner withdraws cash, the owner's drawing account is ____. a. increased by a debit c. decreased by a debit b. increased by a credit d. decreased by a credit
____ 50. A drawing account has a normal ____. a. debit balance and is increased by a debit b. credit balance and is increased by a credit c. debit balance and is increased by a credit d. credit balance and is decreased by a credit
____ 51. The values of all things owned (assets) are on the accounting equation's ____. a. left side c. credit side b. right side d. none of the above
____ 52. The values of all equities or claims against the assets (liabilities and owner's equity) are on the accounting equation's ____. a. left side b. right side c. debit side d. none of the above
____ 53. An amount recorded on the left side of a T account is ____. a. a debit c. normal balance b. a credit d. none of the above
____ 54. The normal balance side of any liability account is ____. a. the debit side c. the left side b. the credit side d. none of the above
____ 55. The normal balance side of an owner's capital account is ____. a. the debit side c. the left side b. the credit side d. none of the above
____ 56. Debits must equal credits ____. a. in a T account b. in the equation's left side c. on the equation's right side d. in all transactions
____ 57. Decreases in an asset account are shown on a T account's ____. a. debit side c. balance side b. credit side d. none of the above
____ 58. Decreases in any liability account are shown on a T account's ____. a. debit side b. credit side c. right side d. none of the above
____ 59. Increases in an owner's capital account are shown on a T account's ____. a. debit side c. left side b. credit side d. none of the above
____ 60. Increases in a revenue account are shown on a T account's ____.

a. debit side b. credit side c. left side d. none of the above
____ 61. The normal balance side of any revenue account is ____. a. the debit side c. the left side b. the credit side d. none of the above
____ 62. The normal balance side of any expense account is ____. a. the debit side c. the right side b. the credit side d. none of the above
____ 63. When services are sold on account for $500.00, ____. a. Sales is decreased with a debit and Accounts Receivable is increased with a credit b. Sales is increased with a debit and Accounts Receivable is increased with a credit c. Sales is increased with a credit and Accounts Receivable is increased with a debit d. Sales is increased with a debit and Accounts Receivable is increased with a debit
____ 64. When $1,500.00 cash is received on account, ____. a. Sales is increased with a credit and Cash is increased with a credit b. Accounts Receivable is increased with a debit and Cash is increased with a credit c. Accounts Receivable is decreased with a credit and Cash is increased with a debit d. Accounts Receivable is decreased with a debit and Cash is increased with a debit
____ 65. A sale on account ____. a. increases an owner's equity account and increases an asset account b. increases a liability account and increases an asset account c. increases an owner's equity account and increases a liability account d. increases an owner's equity account and decreases a liability account

TRUE/FALSE
1. ANS: T
2. ANS: T
3. ANS: F
4. ANS: T
5. ANS: T
6. ANS: T
7. ANS: T
8. ANS: T
9. ANS: F
10. ANS: T
11. ANS: T
12. ANS: T
13. ANS: F
14. ANS: F
15. ANS: T
16. ANS: F
17. ANS: T
18. ANS: F
19. ANS: F
20. ANS: F
21. ANS: F
22. ANS: F
23. ANS: T
24. ANS: F
25. ANS: F
26. ANS: T
27. ANS: T
28. ANS: F
29. ANS: T
30. ANS: F
31. ANS: F
32. ANS: T
33. ANS: T
34. ANS: T
35. ANS: F
MULTIPLE CHOICE
36. ANS: C
37. ANS: A
38. ANS: B
PTS: 1
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39. ANS: B
40. ANS: A
41. ANS: B
42. ANS: A
43. ANS: B
44. ANS: C
45. ANS: A
46. ANS: B
47. ANS: B
48. ANS: A
49. ANS: A
50. ANS: A
51. ANS: A
52. ANS: B
53. ANS: A
54. ANS: B
55. ANS: B
56. ANS: D
57. ANS: B
58. ANS: A
59. ANS: B
60. ANS: B
61. ANS: B
62. ANS: A
63. ANS: C
64. ANS: C
65. ANS: A
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