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Questions and Answers
Double-entry bookkeeping is based on a two-sided accounting entry to maintain financial information
Double-entry bookkeeping is based on a two-sided accounting entry to maintain financial information
method
Every entry to an account requires a corresponding and opposite entry to a different account
Every entry to an account requires a corresponding and opposite entry to a different account
debit
The double-entry system has two equal and corresponding ______ known as debit and credit
The double-entry system has two equal and corresponding ______ known as debit and credit
sides
A transaction in double-entry bookkeeping always affects at least two ______, always includes at least one debit and one credit, and always has total debits and total credits that are equal
A transaction in double-entry bookkeeping always affects at least two ______, always includes at least one debit and one credit, and always has total debits and total credits that are equal
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The purpose of double-entry ______ is to allow the detection of financial errors and fraud
The purpose of double-entry ______ is to allow the detection of financial errors and fraud
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Study Notes
Double-Entry Bookkeeping
- Double-entry bookkeeping is a method of bookkeeping that uses a two-sided accounting entry to maintain financial information.
- Every entry to an account requires a corresponding and opposite entry to a different account.
- The double-entry system has two equal and corresponding sides known as debit and credit.
Characteristics of Double-Entry Bookkeeping
- A transaction in double-entry bookkeeping always affects at least two accounts.
- Each transaction includes at least one debit and one credit.
- The total debits and total credits in a transaction are always equal.
Purpose of Double-Entry Bookkeeping
- The purpose of double-entry bookkeeping is to allow the detection of financial errors and fraud.
Example of Double-Entry Bookkeeping
- If a business takes out a bank loan for $10,000, the transaction would require:
- A debit of $10,000 to an asset account called "Cash".
- A credit of $10,000 to a liability account called "Loan Payable".
- The basic entry to record this transaction in a general ledger would show the debit and credit sides of the transaction.
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Description
Test your knowledge of double-entry bookkeeping with this quiz. Challenge yourself with questions about debit, credit, and the fundamental principles of this accounting method.
