Questions and Answers
What is the purpose of double-entry accounting?
To ensure equal debits and credits for every transaction
In double-entry accounting, how are assets affected?
Assets are increased with debits and decreased with credits
Which side of an account represents a decrease for liabilities?
Credit side
When calculating account balance, what is done with the amounts on the credit side?
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What is the normal balance for an account where increases are recorded on the credit side?
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How do equal debits and credits affect the accounting equation?
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Which account type represents money owed by the company to its suppliers?
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What is the purpose of a trial balance?
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In accounting, when Rent Expense increases, which action is needed in terms of debits and credits?
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What is the main purpose of journalizing?
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Which of the following account types would typically have a credit normal balance?
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Which account has a normal credit balance?
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If a company wants to decrease its Accounts Payable, what action is required in terms of debits and credits?
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When Withdrawals increase, should the corresponding entry be a debit or a credit?
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In the trial balance provided, which account has a debit balance?
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What does the posting process involve?
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What type of balance does an increase in Assets typically have in terms of debits and credits?
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Which statement is true about credits in accounting?
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