1) Transaction: Cash is received by owner as an investment. This would cause cash to increase on which side. a) Debit b) Credit 2) Transaction: Purchased supplies on account. Which account would increase on the credit side? a) Cash b) Accounts Payable c) Accounts Receivable d) Supplies e) Prepaid Insurance f) Capital 3) An accounting device used to analyze transactions a) Computer b) Calculator c) General Ledger d) General Journal e) T Account f) Account Title 4) An amount recorded on the left side of an account. Hint: It is always listed first. a) Credit b) Debit 5) The side of the account that increases (this is different for assets vs liabilities/owner's equity) a) Credit b) Debit c) Normal Balance d) Left e) Right 6) When using a T Square, the value of all things owned goes on which side of the Accounting Equation? a) Left Side (Dr.) b) Right Side (Cr.) 7) An accounting device used to analyze transactions is called a a) Computer b) Calculator c) A Square d) T Square 8) The amount recorded on the left side of an account is called a a) Debit b) Credit 9) The side of the account that is increased is called the a) Debit Balance b) Credit Balance c) Normal Balance d) Total Amount 10) One of the first steps in analyzing a transaction is  a) How is the classification changed? b) Which accounts are affected? c) Determine the debit d) Determine the credit e) What amount is affected? 11) How many accounts are affected in each transaction? a) 0 b) 1 c) 2 d) 3 e) 4 f) 5 12) A list of accounts used by a business is called a a) Charter b) Chart of Accounts c) Vendor List d) Supplier List e) Chart of Activity 13) Transaction: Paid Cash for Supplies. Cash will decrease. Supplies would increase on which side? a) Debit b) Credit 14) Prepaid Insurance is classified as what? a) Asset b) Liability c) Equity 15) Amounts to be paid in the future for goods or services already acquired are called a) Accounts Payable b) Accounts Receivable c) Sales d) Supplies e) Cash 16) Accounts Payable is considered what type of account? a) Asset b) Liability c) Equity 17) Transaction: Purchase supplies on account. Which account would be increased in this transaction a) Supplies b) Accounts Payable c) Both 18) When I pay cash for supplies I bought on account which account will decrease on the debit side? a) Cash b) Accounts Payable c) Accounts Receivable d) Supplies e) Drawing 19) Sales would be categorized as what type of account? a) Asset b) Liability c) Revenue d) Expense 20) When sales are made, it ______________the value of the company. a) Increases b) Decreases 21) Transaction: Received cash from sales. This would be an increase on the ______________side of the sales account. a) Debit b) Credit 22) Amounts to be received in the future due to the sale of goods or services are called a) Sales b) Accounts Payable c) Accounts Receivable d) Cash e) Supplies 23) When you sell services on account you should see an decrease in sales. a) True b) False 24) An expense is a cost of running your business. a) True b) False 25) Expense accounts decrease the value of a company, but like Assets, when recorded the _______________on the debit side. a) Increase b) Decrease 26) The drawing account is used when a) The owner takes money out of the business for personal use b) The owner invests money in the business c) The owner wants to pay suppliers 27) The drawing account decreases the value of the company like expenses. a) True b) False 28) The normal balance side of a liability account is a) credit side b) debit side c) either d) depends 29) When an owner invests cash in a business, the owner's capital account is a) increased by a debit b) decreased by a credit c) increased by a credit d) decreased by a debit 30) When cash is received from sales, the change in the owner's equity is recorded a) in a separate revenue account b) s interest revenue c) directly into the owners capital account d) on the debit side

Accounting Chapter 2 Review

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