Question 1

The normal balance of Owners' Capital is a

Accepted Answer

A)   credit balance.
B)   debit balance.
C)   debit and credit balance.
D)   debit or credit balance.

Question 2

An accountant has debited an asset account for $1,400 and credited a liability account for $500. What can be done to complete the recording of the transaction?

Accepted Answer

A)   Nothing further must be done.
B)   Debit an owner's equity account for $900.
C)   Debit another asset account for $900.
D)   Credit a different asset account for $900.

Question 3

The double-entry system of recording means that debits must equal credits.

Accepted Answer

A) True 
 B)False

Question 4

The chart of accounts is the basic form of an account format.

Accepted Answer

A) True 
 B)False

Question 5

Liability accounts are increased with credits..

Accepted Answer

A) True 
 B)False

Question 6

Receipt of a payment on account requires a credit to Accounts Receivable.

Accepted Answer

A) True 
 B)False

Question 7

Which usually indicates an error?

Accepted Answer

A)   A debit balance in Cash.
B)   A credit balance in Land.
C)   A debit balance in Rent Expense.
D)   A credit balance in Owner's Capital.

Question 8

A purchase of supplies, to be used over several months, on credit is recorded with a

Accepted Answer

A)   debit to Supplies Expense.
B)   credit to Supplies.
C)   debit to Cash.
D)   credit to Accounts Payable.

Question 9

The normal balance of an asset account is a credit.

Accepted Answer

A) True 
 B)False

Question 10

A payment on account increases total expenses.

Accepted Answer

A) True 
 B)False

Question 11

Haircut 101 performed services for cash of $900. To record this transaction, Haircut 101 would

Accepted Answer

A)   debit Accounts Receivable for $900.
B)   credit Accounts Receivable for $900.
C)   credit Service Revenue for $900.
D)   credit Cash for $900.

Question 12

The chart of accounts used by Notwist Copy Company is listed below. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes.

Accepted Answer

The answer of The chart of accounts used by Notwist...

Question 13

Which account listed below is increased with a debit?

Accepted Answer

A)   Capital account
B)   Revenue account
C)   Liability account
D)   Owner's Drawings account

Question 14

A credit to a liability account indicates

Accepted Answer

A)   that Cash decreased.
B)   that the normal balance of the account is a credit.
C)   a decrease in the liability.
D)   an increase in the liability.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The purchase of equipment is recorded with a debit to the Equipment account.

Accepted Answer

A) True 
 B)False

Question 18

A debit to an asset account indicates

Accepted Answer

A)   an error.
B)   a credit was made to a liability account.
C)   a decrease in the asset.
D)   an increase in the asset.

Question 19

The accounting equation could be written as assets - owner's capital = liabilities.

Accepted Answer

A) True 
 B)False

Question 20

A debit is not the normal balance for which of the following accounts?

Accepted Answer

A)   Expense account
B)   Revenue account
C)   Asset account
D)   Owner's Drawings account

Exam 3: The Recording Process: Debits and Credits

The double-entry system of recording means that debits must equal credits.

Correct AnswerverifiedShow Answer

Receipt of a payment on account requires a credit to Accounts Receivable.

Correct AnswerverifiedShow Answer

An accountant has debited an asset account for $1,400 and credited a liability account for $500. What can be done to complete the recording of the transaction?

Correct AnswerverifiedShow Answer

A debit is not the normal balance for which of the following accounts?

Correct AnswerverifiedShow Answer

The chart of accounts is the basic form of an account format.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The normal balance of Owners' Capital is a

Correct AnswerverifiedShow Answer

A debit to an asset account indicates

Correct AnswerverifiedShow Answer

Which account listed below is increased with a debit?

Correct AnswerverifiedShow Answer

The accounting equation could be written as assets - owner's capital = liabilities.

Correct AnswerverifiedShow Answer

A payment on account increases total expenses.

Correct AnswerverifiedShow Answer

The purchase of equipment is recorded with a debit to the Equipment account.

Correct AnswerverifiedShow Answer

A credit to a liability account indicates

Correct AnswerverifiedShow Answer

The chart of accounts used by Notwist Copy Company is listed below. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes.

Correct AnswerverifiedShow Answer

The normal balance of an asset account is a credit.

Correct AnswerverifiedShow Answer

A purchase of supplies, to be used over several months, on credit is recorded with a

Correct AnswerverifiedShow Answer

Which usually indicates an error?

Correct AnswerverifiedShow Answer

Liability accounts are increased with credits..

Correct AnswerverifiedShow Answer

Haircut 101 performed services for cash of $900. To record this transaction, Haircut 101 would

Correct AnswerverifiedShow Answer

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