Exam 2: Debits and Credits: Analyzing and Recording Business Transactions

Why is Revenue increased on the Credit side? (Explain as it pertains to the expanded accounting equation and its relationship to Owner's Equity.)

A debit to a Liability account was posted as a debit to an Asset account. This error would cause:

The debit side is always the left side of Asset accounts only.

On which financial statement would you find the ending balance in the Capital account?

Which of the following is prepared first?

Which of the following accounts would be increased by a debit?

Explain the difference between expenses and withdrawals.

The right side of an account is always the normal balance side.

A chart of accounts is below. Following is a series of transactions. Indicate for each transaction the accounts that should be debited and credited by inserting the proper account number in the space provided.

Which of the following groups of accounts have a normal credit balance?

What is a proper entry to show the owner making an investment in the company?

The income statement contains:

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, and in Column 3 the financial statement that the account appears upon. -

Given the following list of accounts with normal balances, what are the trial balance totals of the debits and credits?

Which of the following errors would cause the trial balance to be out of balance?

A credit to a liability account was posted as a debit to the Revenue account. This error would cause:

Withdrawals and expenses are reported on the income statement.

A transaction that involves more than one credit or more than one debit is called a compound entry.

The beginning balance in the Capital account would appear on which financial statement?

A chart of accounts: