Bookkeeping Quiz

What is double-entry bookkeeping?

• A method of accounting where every financial transaction has equal and opposite effects in at least two different accounts.

• A method of accounting where every financial transaction has equal and opposite effects in four different accounts.

• A method of accounting where every financial transaction has equal and opposite effects in only one account.

• A method of accounting where every financial transaction has equal and opposite effects in three different accounts.

What are the two fundamental principles of double-entry bookkeeping?

• Principle of multiplication and division

• Principle of addition and subtraction

• Principle of income and expense

• Principle of debit and credit, Principle of duality

Explain the concept of debits and credits in double-entry bookkeeping.

• Debits and credits are used to track inventory in double-entry bookkeeping.

• Debits and credits are used to record personal information in double-entry bookkeeping.

• Debits and credits are used to calculate profits and losses in double-entry bookkeeping.

• Debits and credits are used to record financial transactions in double-entry bookkeeping.

What is the purpose of a general ledger in double-entry bookkeeping?

• To manage customer relationships

• To record all financial transactions of a company in a systematic and organized manner.

• To track employee attendance

• To calculate taxes owed by the company

What is the equation that represents the fundamental principle of double-entry bookkeeping?

• Assets = Liabilities + Equity

• Assets = Liabilities - Equity

• Assets + Liabilities = Equity

• Assets - Liabilities = Equity

What is the purpose of a trial balance in double-entry bookkeeping?

• To record all financial transactions.

• To calculate the net profit of a business.

• To ensure that the total debits equal the total credits.

• To determine the value of assets and liabilities.

What is the difference between a journal and a ledger in double-entry bookkeeping?

• A journal is used to record expenses, while a ledger is used to record revenues.

• A journal is used to record transactions for individuals, while a ledger is used to record transactions for businesses.

• A journal is used to record transactions in chronological order, while a ledger is used to classify and summarize transactions.

• A journal is used to record transactions in alphabetical order, while a ledger is used to classify and summarize transactions.

What is the purpose of a chart of accounts in double-entry bookkeeping?

• The purpose of a chart of accounts is to track employee attendance.

• The purpose of a chart of accounts is to calculate taxes.

• The purpose of a chart of accounts is to manage inventory.

• The purpose of a chart of accounts is to classify and record financial transactions.

What is the role of an accountant in double-entry bookkeeping?

• To create financial reports

• To manage payroll

• To provide tax advice

• To record financial transactions in a systematic and accurate manner.

Explain the concept of balancing the books in double-entry bookkeeping.

• Recording all financial transactions in a single column.

• Comparing the income statement to the balance sheet.

• Calculating the net profit of a company.

• Ensuring that the total debits equal the total credits in a set of financial records.