Financial Accounting Quiz

What is the purpose of a double entry system?

• To eliminate the need for audits
• To ensure accuracy in recording financial transactions.
• To confuse accountants
• To speed up financial reporting

When a business pays for an expense, which account is debited?

• Income account

• Drawings account

• Carriages account

• Expenses account

What is the term used for money spent to run the business on a day-to-day basis?

• Income

• Carriages

• Drawings

• Expenses

What is the term used for the value withdrawn from the business by the owner for personal use?

• Expenses

• Drawings

• Income

• Carriages

Which account gets debited when a business pays for the delivery of raw materials into their business?

• Carriage outwards account

• Expenses account

• Drawings account

• Carriages inwards account

What is the double entry for recording this transaction?

Binth buys inventory of $2000 by using a cheque

• Debit Accounts Payable $2000, Credit Inventory $2000
• Debit Cash $2000, Credit Inventory $2000
• Debit Bank $2000, Credit Inventory $2000
• Debit Inventory $2000, Credit Bank $2000

What is the double entry for recording this transaction?

Enas starts a consulting business. She invests $10,000 of her own money into the business.

• Debit Rent Expense, Credit Utilities Expense
• Debit Cash, Credit Owner's Equity
• Debit Supplies, Credit Accounts Receivable
• Debit Accounts Payable, Credit Cash

What are the accounts involved in the transaction?

Shaiymal pays $500 in cash for office equipment worth $3000 on credit.

• Cash and Prepaid Expenses
• Cash and Accounts Payable
• Accounts Receivable and Accounts Payable
• Cash and Inventory

What is the double entry for recording this transaction?

Maya sells goods for $1000 in cash

• Debit Cash $1000, Credit Sales $1000

• Debit Accounts Receivable $1000, Credit Sales $1000

• Debit Sales $1000, Credit Cash $1000

• Debit Cash $1000, Credit Accounts Payable $1000

What is the double entry for recording this transaction?

Sam pays $500 in advance for services to be provided next month

• Debit Prepaid Expenses $500, Credit Cash $500

• Debit Cash $500, Credit Accounts Payable $500

• Debit Cash $500, Credit Prepaid Revenue $500

• Debit Accounts Receivable $500, Credit Cash $500