1. The first step in the processing of a transaction is to analyze the transaction and source documents. True False 2. Preparation of a trial balance is the first step in the analyzing and recording process. True False 3. Source documents provide evidence of business transactions and are the basis for accounting entries. True False 4. Items such as sales tickets, bank statements, checks, and purchase orders are source documents. True False 5. An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item. True False 6. A customer's promise to pay is called an account payable to the seller. True False 7. Withdrawals by the owner are a business expense. True False

8. The chart of accounts is a list of all the accounts used by a company and includes an identification number assigned to each account. True False 9. An account balance is the difference between the debits and credits for an account including any beginning balance. True False 10. Debit means the right side of an account. True False 11. In a double-entry accounting system, the total amount debited must always equal the total amount credited. True False 12. Increases in liability accounts are recorded as debits. True False 13. Debits increase asset and expense accounts. True False 14. Credits always increase account balances. True False 15. Crediting an expense account decreases it. True False 16. A revenue account normally has a debit balance. True False 17. Accounts are normally decreased by debits. True False 18. The owner's withdrawal account normally has a credit balance since it is an equity account. True False 19. Asset accounts normally have credit balances and revenue accounts normally have debit balances. True False 20. An owner's capital account normally has a debit balance. True False 21. A debit entry is always favorable. True False 22. The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable. True False 23. If a company purchases land paying cash, the journal entry to record this transaction will include a debit to Cash. True False 24. If a company provides services to a customer on credit the selling company should credit Accounts Receivable. True False 25. When a company bills a customer for $600 for services rendered, the journal entry to record this transaction will include a $600 debit to Services Revenue. True False 27. Posting is the transfer of journal entry information to the ledger. True False 28. Transactions are first recorded in the ledger. True False 29. The journal is known as a book of original entry. True False 30. A journal gives a complete record of each transaction in one place, and shows the debits and credits for each transaction. True False 31. The journal is known as the book of final entry because financial statements are prepared from it. True False 32. The trial balance is a list of all accounts and their balances at a point in time taken from the ledger. True False