How Transactions Affect the Accounting Equation

 What two accounts are involved when you receive cash from owner as an investment?

• cash and capital
• cash and investment
• cash and owner's equity
• cash and supplies

 When you receive cash from sales, you debit cash and credit sales

• False
• True

 Paying cash for insurance increases and decreases an asset.

• False 
• True

 When you pay cash for supplies, you debit supplies.

• False
• True

 Buying supplies on account creates a receivable.

• False
• True

When you pay cash on account by writing check number 20, your doc/ref number is r20. 

• False
• True

Any activity that changes the Accounting Equation is called a payment.

• False
• True

A sale for which payment will be received at a later date is called a sale on account.

• False
• True

A withdrawl decreases owner's equity

• False
• True

A T account is a device used to analyze transactions in accounting.

• False
• True