Accounting Basics

What is double entry bookkeeping?

• A way to track personal expenses

• A technique for budgeting

• A system for managing inventory

• A method of recording financial transactions

What are the two types of accounts in double entry bookkeeping?

• income and expense

• assets and liabilities

• debit and credit

• revenue and cost

What is the purpose of debits and credits in accounting?

• Debits and credits are used to record and track the flow of money in a business.

• Debits and credits are used to track the number of employees in a business.

• Debits and credits are used to determine the value of assets and liabilities in a business.

• Debits and credits are used to calculate profits and losses in a business.

Which side of the account is debited?

• Right

• Bottom

• Left

• Top

Which side of the account is credited?

• top

• bottom

• right

• left

What is the normal balance for assets?

• debit

• liabilities

• zero

• credit

What is the normal balance for liabilities?

• debit

• zero

• positive

• credit

What is the normal balance for equity?

• debit

• zero

• asset

• credit

What is the normal balance for revenue?

• negative

• credit

• debit

• zero

What is the normal balance for expenses?

• debit

• zero balance

• credit

• assets