Bookkeeping Quiz
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Questions and Answers

Which of the following best describes bookkeeping?

  • The process of preparing tax returns
  • The process of analyzing financial statements
  • The process of recording data related to accounting transactions (correct)
  • The process of auditing financial records

    • Which system requires every transaction to affect two items?

  • Single entry system
  • Triple entry system
  • Multiple entry system
  • Double entry system (correct)

    • What is the effect of recording an expense in an account?

  • Debit increases equity
  • Credit decreases equity
  • Debit decreases assets (correct)
  • Credit increases assets

    • When an owner starts a business with cash, how is the transaction recorded?

    <p>Debit Cash/Bank A/C, Credit Equity A/C</p> Signup and view all the answers

    What is the effect of recording a sale of goods for cash?

    <p>Debit Cash/Bank A/C, Credit Sales A/C</p> Signup and view all the answers

    What is the purpose of double entry bookkeeping?

    <p>To ensure that every transaction affects two items</p> Signup and view all the answers

    How are expenses recorded in an account?

    <p>Debit</p> Signup and view all the answers

    What is the effect of recording a purchase of non-current assets with cash?

    <p>Debit Equipment A/C, Credit Cash/Bank A/C</p> Signup and view all the answers

    How is a purchase of goods for resale on credit recorded?

    <p>Debit Purchases A/C, Credit Trade Payable</p> Signup and view all the answers

    What is the effect of recording a sale of goods for cash?

    <p>Debit Sales A/C, Credit Cash/Bank A/C</p> Signup and view all the answers

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