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Unformatted text preview: ch3 Student: ___________________________________________________________________________ 1. The credit side of an account is the right side, while the debit side is the left side. True False 2. In a computerized accounting system, posting may be done automatically but journalizing must be done by someone with an understanding of recording transactions. True False 3. The running balance form or the T account form is typically used in the trial balance to display the accounts and their amounts. True False 4. Dividends are an expense of a corporation and reduce both total assets and liabilities. True False 5. Dividends increase owners' equity and therefore should be added to retained earnings. True False 6. Every business transaction is recorded by a debit to a balance sheet account and a credit to an income statement account. True False 7. Earning revenue increases owners' equity and expenses reduce owners' equity, therefore, revenues are recorded with debit entries and expenses are recorded with credit entries. True False 8. A trial balance cannot be distributed to stockholders in lieu of a balance sheet. True False 9. Accounts are usually arranged in the ledger in financial statement order, that is, assets first, followed by liabilities, owners' equity, expenses, and revenues. True False 10. A credit to a ledger account refers to the entry of an amount on the right side of an account. True False 11. The left-hand side of an account is used for recording debits and the right-hand side for recording credits. True False 12. If the number of debit entries in an account is greater than the number of credit entries, the account will have a debit balance. True False 13. Liability accounts should only be debited and never credited. True False 14. Increases in owners' equity are recorded by credits; increases in assets and in liabilities are recorded by debits. True False 15. When making a general journal entry, there can only be one debit and one credit. True False 16. A business that is profitable and liquid will have more accounts with credit balances than with debit balances. True False 17. Every transaction affects equal numbers of ledger accounts and is recorded by equal dollar amounts of debits and credits. True False 18. When a company uses the double-entry method, the total dollar amount of debits recorded must equal the total dollar amount of credits recorded, but the number of debit and credit entries may differ. True False 19. If ledger accounts are maintained in three-column, running balance form, the journal should be maintained in the same format. True False 20. The general ledger is sometimes called the book of original entry because it is the accounting record where transactions are first recorded....
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- Spring '13