17. cash is increased with a debit.\n18. prepaid insurance is decreased with a credit.\n19. to summarize…

17. cash is increased with a debit.\n18. prepaid insurance is decreased with a credit.\n19. to summarize withdrawal information separately from the other records, owner withdrawal transactions are recorded in the owners capital account.\n20. decreases to liability accounts are recorded on the credit side.

17. cash is increased with a debit.\n18. prepaid insurance is decreased with a credit.\n19. to summarize withdrawal information separately from the other records, owner withdrawal transactions are recorded in the owners capital account.\n20. decreases to liability accounts are recorded on the credit side.

Answer

Brief Explanations:

  1. In accounting, asset accounts like cash increase with a debit entry. So, the statement "Cash is increased with a debit" is correct.
  2. Prepaid Insurance is an asset account. Asset accounts decrease with a credit entry. So, "Prepaid Insurance is decreased with a credit" is correct.
  3. Owner - withdrawal transactions are recorded in the owner's drawing account, not the owner's capital account. So, this statement is incorrect.
  4. Liability accounts increase on the credit side and decrease on the debit side. So, the statement "Decreases to liability accounts are recorded on the credit side" is incorrect.

Answer:

  1. True
  2. True
  3. False
  4. False