6/8/23, 10:07 AM Chapter 02 - 1 - Analyzing and Recording Transactions

Chapter 02 - 1 - Analyzing and Recording

Transactions
Total points 27/28

TRUE/FALSE

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anusha1987ca@gmail.com

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Sharmila Manoharan

Chapter 02 - Analyzing and Recording Transactions 27 of 28 points

Withdrawals are a type of transaction that affects equity.  * 1/1

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FALSE

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6/8/23, 10:07 AM Chapter 02 - 1 - Analyzing and Recording Transactions

The accounting equation is expressed as assets = liabilities - equity.  * 1/1

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An account balance is the difference between the increases and *1/1

decreases recorded in an account. 

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FALSE

Double-entry accounting means that every transaction affects and is *1/1

recorded in at least two accounts. 

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FALSE

All increases and decreases in cash are not necessarily recorded in the *1/1
Cash account. 

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FALSE

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6/8/23, 10:07 AM Chapter 02 - 1 - Analyzing and Recording Transactions

The accounting equation can be expressed as liabilities = assets - equity.  * 1/1

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Because they decrease equity, withdrawals made by a business owner *1/1

are credited to his/her Withdrawals account. 

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When a company sells services in which cash will not be received until *1/1
some future date, the company should credit an unearned revenues
account for the amount charged to the customer. 

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FALSE

Cash withdrawn by the owner of an unincorporated business in the form *1/1

of a monthly salary should be treated as an expense of the business. 

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FALSE

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6/8/23, 10:07 AM Chapter 02 - 1 - Analyzing and Recording Transactions

A ledger is a type of account.  * 1/1

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Debits increase asset and expense accounts.  * 1/1

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Credits to accounts are always increases.  * 1/1

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FALSE

In a double-entry accounting system, total debits must always equal total *1/1
credits. 

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FALSE

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6/8/23, 10:07 AM Chapter 02 - 1 - Analyzing and Recording Transactions

To credit an asset account means to decrease it.  * 1/1

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The normal balance of an account refers to the debit or credit side where *1/1
increases are recorded. 

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FALSE

Asset accounts normally have credit balances and expense accounts *1/1
normally have debit balances. 

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FALSE

To make it easier for the bookkeeper, the cost of land is separated from *1/1
the cost of buildings located on the land. 

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FALSE

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6/8/23, 10:07 AM Chapter 02 - 1 - Analyzing and Recording Transactions

An account is a detailed record of increases and decreases in a specific *0/1

asset, liability or equity item. 

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FALSE

Unearned revenues are assets, because a service or product is owed to *1/1

the customer. 

TRUE

FALSE

Debits to accounts are normally decreases.  * 1/1

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FALSE

Goods sold on credit to customers are called accounts payable.  * 1/1

TRUE

FALSE

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6/8/23, 10:07 AM Chapter 02 - 1 - Analyzing and Recording Transactions

A prepaid expense occurs when a company pays in advance for a service *1/1
or goods for which the benefit extends beyond the current accounting
period. 

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FALSE

A building is an example of an asset that does not provide any benefit to *1/1
its owner. 

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FALSE

The left side of a T-account is always the credit side, while the right side *1/1
is always the debit side. 

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FALSE

A revenue account normally has a debit balance.  * 1/1

TRUE

FALSE

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6/8/23, 10:07 AM Chapter 02 - 1 - Analyzing and Recording Transactions

The first step in the accounting cycle is to analyze transactions.  * 1/1

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FALSE

Increases in liabilities are recorded as debits.  * 1/1

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FALSE

A T-Account is a formal account frequently used in business.  * 1/1

TRUE

FALSE

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6/8/23, 10:07 AM Chapter 02 - 1 - Analyzing and Recording Transactions

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