5 Questions
Match the following terms related to double-entry bookkeeping with their definitions:
Double-entry bookkeeping = A method of bookkeeping that relies on a two-sided accounting entry to maintain financial information Debit = An entry on the left side of an account Credit = An entry on the right side of an account Asset account = An account that records the value of items owned by a business
Match the following statements about double-entry bookkeeping with their accuracy:
Every entry to an account requires a corresponding and opposite entry to a different account = True A transaction in double-entry bookkeeping always affects at least two accounts = True A transaction in double-entry bookkeeping always includes at least one debit and one credit = True The purpose of double-entry bookkeeping is to allow the detection of financial errors and fraud = True
Match the following examples of transactions with their correct double-entry bookkeeping entries:
A business takes out a bank loan for $10,000 = Debit: Cash $10,000, Credit: Loan $10,000 A customer pays $500 in cash for a product = Debit: Cash $500, Credit: Sales $500 A business purchases $1,000 worth of office supplies on credit = Debit: Office Supplies $1,000, Credit: Accounts Payable $1,000 A business receives $2,000 for services rendered = Debit: Accounts Receivable $2,000, Credit: Sales $2,000
Match the following terms related to double-entry bookkeeping with their correct descriptions:
Debit = An accounting entry that increases an asset or expense account, or decreases a liability or equity account Credit = An accounting entry that decreases an asset or expense account, or increases a liability or equity account Liability account = An account that records debts or obligations of a business Equity account = An account that represents the residual value of assets after deducting liabilities
Match the following statements about double-entry bookkeeping with their accuracy:
The double-entry system has two equal and corresponding sides known as debit and credit = True The total debits and total credits in a transaction are always equal = True A transaction in double-entry bookkeeping can affect more than two accounts = True Double-entry bookkeeping is a method that is no longer used in modern accounting = False
Test your knowledge of double-entry bookkeeping with this quiz. Learn about the principles and methods of this accounting technique that uses debit and credit to record transactions accurately.
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