1) The terms "account" and "ledger" are the same and may be used interchangeably.

a) true

b) false

2) Drawings are included in the income statement.

a) true

b) false

3) An example of a transaction demonstrating drawings would be an owner taking equipment of the company for her/his own use.

a) true

b) false

4) If revenue exceeds expenses, there will always be an increase in equity.

a) true

b) false

5) If a company paid its phone bill using cash, one of the accounts affected would be a liability account.

a) true

b) false

6) Equity decreases on the debit side.

a) true

b) false

7) Expenses are recorded on the credit side of the account.

a) true

b) false

8) The year is only recorded on the first line of each page of the journal.

a) true

b) false

9) Accounting entries are first recorded in the journal.

a) true

b) false

10) In a journal entry, accounts to be debited are recorded before accounts to be credited.

a) true

b) false

11) When a customer purchases an item on account, the accounting clerk for the seller will debit Accounts Receivable.

a) true

b) false

12) A group or file of accounts is called a ledger.

a) true

b) false

13) A ledger only keeps records for a period of one year.

a) true

b) false

14) A balance sheet can be prepared from information in the ledger.

a) true

b) false

15) Revenues are credited when a sale is made.

a) true

b) false

16) Capital decreases on the credit side.

a) true

b) false

17) Drawings are not included in the income statement.

a) true

b) false

18) Drawings increase the owner's equity.

a) true

b) false