Multiple Choice and Short Answer Questions On Accounting

A debit to an asset account indicates an increase in the asset. In accounting, debiting an asset account means that there has been an inflow or addition to that asset. This could be due to various reasons such as a purchase of an asset, an increase in the value of an asset, or receipt of cash from a customer. Therefore, option d, an increase in the asset, is the correct explanation for a debit to an asset account.

The correct answer is "A way of showing the basic form of an account." A T-account is a visual representation of an account that shows the debit and credit sides of the account. It is called a T-account because it resembles the letter "T", with the left side representing the debit side and the right side representing the credit side. This format allows for easy understanding and analysis of transactions and balances in an account.

The correct answer is "decrease assets and increase liabilities". This means that when credits are recorded, it results in a decrease in the value of assets and an increase in the value of liabilities. This is because credits represent amounts owed by the business to its creditors, which increases the liabilities. At the same time, the assets decrease because the business has to pay off its debts.

The normal balance of any account is the side which increases that account. This means that for assets, expenses, and losses, the normal balance is on the left side, while for liabilities, equity, and revenues, the normal balance is on the right side. When transactions are recorded, increases to assets, expenses, and losses are debited, while increases to liabilities, equity, and revenues are credited. Therefore, the side which increases the account determines its normal balance.

The left side of an account is referred to as the debit side. In accounting, every transaction is recorded using a double-entry system, which means that every entry has both a debit and a credit side. The debit side represents the increase in assets or expenses and the decrease in liabilities or revenues. On the other hand, the credit side represents the increase in liabilities or revenues and the decrease in assets or expenses. Therefore, the left side of an account is commonly associated with the debit side.

The correct answer is "is the credit side". In accounting, each account has two sides: the left side is called the debit side, and the right side is called the credit side. The credit side of an account represents increases in liabilities, revenues, and capital, and decreases in assets and expenses. Therefore, the right side of an account is referred to as the credit side.

An account is not a source document. Source documents are the original records that provide evidence of a transaction, such as invoices, receipts, or bank statements. An account, on the other hand, is a record that summarizes the financial transactions related to a particular asset, liability, equity, revenue, or expense. It includes a title, debit and credit sides, and may be part of a manual or computerized accounting system.

The correct answer is Trial Balance because a Trial Balance is not a specific part of an account. It is a statement that lists the balances of all the accounts in the general ledger, showing the total debits and credits. It is used to ensure that the total debits equal the total credits in the financial records. On the other hand, the credit side, debit side, and title are all components or aspects of an account.

The normal balance for a drawing account is a debit, not a credit. A drawing account is used to track withdrawals made by the owner of a business. Since withdrawals decrease the owner's equity, they are recorded as debits. Therefore, a credit is not the normal balance for a drawing account.

The normal balance for an account refers to whether an increase in that account is recorded as a debit or a credit. In the case of Service Revenue, the normal balance is a credit. This means that when there is an increase in Service Revenue, it is recorded as a credit entry. The other accounts listed (Drawing, Cash, and Accounts Receivable) all have normal balances as debits, meaning that an increase in those accounts is recorded as a debit entry.