Accounting Basics Quiz

What is essential to understand before you can interpret accounting numbers?

• The income statement

• The fundamental accounting equation

• The debit-credit theory

• The balance sheet

In accounting, where are debits and credits recorded?

• Debits on the top, credits on the bottom

• Debits on the left, credits on the right

• Debits on the bottom, credits on the top

• Debits on the right, credits on the left

What happens to an asset when it is credited?

• It remains the same

• It decreases

• It increases

• It is transferred

Which of the following is true for liabilities and equity in terms of debits and credits?

• Credits increase liabilities and equity

• Debits decrease liabilities and equity

• Credits decrease liabilities and equity

• Debits increase liabilities and equity

What is necessary for complete satisfaction in accounting?

• Increasing assets

• Balancing all transactions

• Decreasing liabilities

• Increasing equity