ACC Chapter 4 Quiz

What are the two sides used in double-entry bookkeeping to record every transaction?

• Debit and credit
• Cash and loan payable
• Assets and liabilities
• Income and expenses

Why is double-entry bookkeeping important?

• It helps businesses know their financial health.
• It records each transaction in at least two accounts.
• It keeps track of incoming and outgoing cash.
• It is simpler and used by smaller businesses.

Which type of bookkeeping is more accurate and used by bigger businesses?

• Single-entry bookkeeping
• Double-entry bookkeeping
• Journal entry bookkeeping
• Financial statement bookkeeping

What is the purpose of the rules of debit and credit in accounting?

• To keep track of financial transactions
• To determine the normal balance of each account type
• To ensure that the accounting equation remains balanced
• To record transactions using the double-entry procedure

Which side of the T-account represents debits?

• Left side
• Right side
• Top side
• Bottom side

What is the normal balance for liabilities?

• Credit
• Debit
• Neither credit nor debit
• Both credit and debit

How does the concept of normal balance in accounting relate to the rules of debit and credit?

• The concept of normal balance determines which side of the T-account represents debits and credits.
• The concept of normal balance helps accountants keep track of financial transactions.
• The concept of normal balance ensures that the accounting equation remains balanced.
• The concept of normal balance determines whether an account has an abnormal balance.

Why is it important for the total dollar amount of debits to equal the total dollar amount of credits in a transaction?

• To ensure that the accounting equation remains balanced.
• To determine the normal balance of each account type.
• To record transactions using the double-entry procedure.
• To keep track of financial transactions.

How does the rule 'debit the receiver and credit the giver' apply to recording transactions in accounting?

• If you receive something, you debit the account; if you give something, you credit the account.
• If you receive something, you credit the account; if you give something, you debit the account.
• If you receive something, you increase the debit side; if you give something, you increase the credit side.
• If you receive something, you decrease the debit side; if you give something, you decrease the credit side.

An account’s __________________ is always on the side used to record increases to the account.

• normal balance
• debit
• credit
• double-entry accounting