Debit and Credit Skills Assessment

What is the accounting equation?

• Assets = Liabilities + Equity

• Liabilities = Assets + Equity

• Assets - Liabilities = Equity

• Assets = Liabilities - Equity

When should a debit be recorded?

• When there is an increase in liabilities or revenue, or a decrease in assets or expenses.

• When there is an increase in equity or income, or a decrease in liabilities or expenses.

• When there is an increase in assets or expenses, or a decrease in liabilities or revenue.

• When there is no change in assets, liabilities, revenue, or expenses.

When should a credit be recorded?

• When there is a decrease in equity and an increase in assets

• When there is an increase in liabilities or equity, or a decrease in assets.

• When there is a decrease in liabilities and equity, or an increase in assets

• When there is an increase in assets and a decrease in liabilities

Which side of the accounting equation do debits go on?

• None of the sides

• Left side

• Both sides

• Right side

Which side of the accounting equation do credits go on?

• Front side

• Right side

• Top side

• Left side

What is the normal balance for an asset account?

• Credit

• Debit

• Negative balance

• Zero balance

What is the normal balance for a liability account?

• Credit

• Debit

• Zero balance

• Asset

What is the normal balance for an equity account?

• Negative balance

• Zero balance

• Debit

• Credit

What is the normal balance for a revenue account?

• Zero balance

• Asset

• Debit

• Credit

What is the normal balance for an expense account?

• Asset

• Debit

• Zero balance

• Credit