Double Entry Bookkeeping Quiz

What are examples of assets?

• Examples of assets include liabilities, expenses, and equity.

• Examples of assets include cash, investments, accounts receivable, inventory, and property.

• Examples of assets include accounts payable, salaries payable, and utilities payable.

• Examples of assets include revenue, cost of goods sold, and depreciation.

What are examples of liabilities?

• Loans, accounts payable, bonds payable

• Stockholders' equity, retained earnings, dividends

• Revenue, expenses, assets

• Cash, inventory, equipment

What are examples of income?

• Gifts, inheritance, lottery winnings

• Child support, alimony, social security benefits

• Student loans, grants, scholarships

• Salary, wages, rental income, interest, dividends

What are examples of expenses?

• Taxes, insurance, investments, savings

• Furniture, electronics, gadgets, jewelry

• Rent, utilities, salaries, supplies

• Groceries, entertainment, clothing, transportation

What is a journal entry?

• A type of bank statement

• A type of business contract

• A record of a business transaction in a double entry accounting system

• A type of personal diary

How are journal entries recorded?

• By multiplying the amounts of all accounts

• By adding the amounts of all accounts

• By subtracting the amounts of all accounts

• By debiting one account and crediting another account

What is a trial balance used for?

• To determine the amount of cash in the petty cash fund

• To track the number of employees in the company

• To ensure that the total of all debit balances equals the total of all credit balances in the ledger accounts.

• To calculate the total profit for the period

How is a trial balance prepared?

• By listing all the general ledger accounts with their respective debit or credit balances, and then totaling the debit and credit balances to ensure they are equal.

• By totaling the debit and credit balances without listing the accounts

• By randomly selecting accounts and their balances

• By only listing the credit balances of general ledger accounts

What are the components of financial statements?

• Profit and loss statement, tax statement, inventory statement

• Sales report, purchase order, payroll statement

• Budget report, marketing plan, customer feedback survey

• Balance sheet, income statement, cash flow statement, and statement of changes in equity

How are financial statements used by businesses?

• To plan a vacation, buy a car, and go shopping

• To make sandwiches, bake cookies, and brew coffee

• To assess financial performance, make informed decisions, attract investors, and comply with regulations.

• To write a novel, paint a picture, and compose music