Rules And Transaction

Question 1

An asset account increases and a corresponding claims (liabilities or owner’s equity) account increases. Examples: (1) Purchase of supplies on account; (2) Sold goods on cash on delivery basis.

Answer 1

Source of Assets (SA).

Question 2

One asset account increases and another asset account decreases. Example: Acquired equipment for cash.

Answer 2

Exchange of Assets (EA).

Question 3

An asset account decreases and a corresponding claims (liabilities or equity) account decreases. Example: (1) Settled accounts payable; (2) Paid salaries of employees

Answer 3

Use of Assets (UA).

Question 4

One claims (liabilities or owner’s equity) account increases and another claims (liabilities or owner’s equity) account decreases. Example: Received utilities bill but did not pay.

Answer 4

Exchange of Claims (EC).

Question 5

Increase in Assets = Increase in Liabilities

Answer 5

Source of Assets

Question 6

Increase in Assets = Increase in Owner’s Equity

Answer 6

Source of Assets

Question 7

Increase in one Asset=Decrease in another Asset

Answer 7

Exchange of Assets

Question 8

Decrease in Assets = Decrease in Liabilities

Answer 8

Use of Assets

Question 9

Decrease in Assets = Decrease in Owner’s Equity

Answer 9

Use of Assets

Question 10

Increase in Liabilities = Decrease in Owner’s Equity

Answer 10

Exchange of Claims

Question 11

Increase in Owner’s Equity = Decrease in Liabilities

Answer 11

Exchange of Claims

Question 12

Increase in one Liability = Decrease in another Liability

Answer 12

Exchange of Claims

Question 13

Increase in one Owner’s Equity = Decrease in another Owner’s Equity

Answer 13

Exchange of Claims

Question 14

Assets
Debit if _______

Answer 14

Increases

Question 15

ASSETS
Credit if ___________

Answer 15

Decreases

Question 16

LIABILITIES and OWNERS EQUITY
Debit if _______

Answer 16

Decreases

Question 17

LIABILITIES and OWNERS EQUITY
Credit if ___________

Answer 17

Increases

Question 18

EXPENSES
Debit if _________

Answer 18

Increases

Question 19

EXPENSES
Credit if __________

Answer 19

Decreases

Question 20

INCOME
Debit if _______

Answer 20

Decreases

Question 21

INCOME
Credit if __________

Answer 21

Increases