10 Questions
Which accounts have normal credit balances?
Liabilities and Revenues
What is the normal debit balance for expenses?
Expenses
According to the Expense recognition principle, when should revenue be recognized in a service type of business?
When the service or product is delivered
Why are adjusting entries required?
To properly record accrued expenses
What happens to stockholders equity when expenses are incurred?
It decreases
Which side of an account shows the normal debit balance?
Debit side
What is the purpose of an income statement?
To report the profitability of a company
What is the first step in the accounting process?
Identify and analyze business transactions
Which accounts have normal credit balances?
Liabilities and Revenues
What is the purpose of a retained earnings statement?
To report changes in retained earnings
Test your knowledge on accounting basics with this quiz! Learn about accounts, their debit and credit sides, and which accounts have normal credit and debit balances. Discover what expenses are, how they affect stockholders' equity, and more. Challenge yourself and see how well you understand these fundamental concepts in accounting.
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