Double Entry Quiz

What is the fundamental principle of double-entry bookkeeping?

• Each transaction is recorded once.

• Each transaction is recorded twice, once as a debit and once as a credit.

• Each transaction is recorded three times.

• Each transaction is recorded only in the cash book.

In double-entry bookkeeping, what does a debit entry signify?

• An increase in liabilities.

• A decrease in assets.

• An increase in assets.

• A decrease in expenses.

Which of the following accounts would typically have a credit balance?

• Cash

• Accounts Receivable

• Revenue

• Expenses

If a business purchases office supplies on credit, which accounts are affected?

• Office Supplies and Cash

• Office Supplies and Accounts Payable

• Cash and Accounts Receivable

• Office Supplies and Revenue

What is the effect on the accounting equation when a company pays off a liability?

• Assets increase, liabilities decrease.

• Assets decrease, liabilities decrease.

• Assets increase, equity increases.

• Liabilities increase, equity decreases.

Which of the following is an example of a contra account?

• Accounts Receivable

• Accumulated Depreciation

• Revenue

• Cash

In double-entry bookkeeping, what is the purpose of a trial balance?

• To summarise the financial position of the business.

• To ensure that total debits equal total credits.

• To record all transactions in chronological order.

• To prepare financial statements.

Which of the following transactions would result in a debit to the Cash account?

• Paying a supplier.

• Receiving a loan from the bank.

• Purchasing equipment.

• Issuing shares.

What is the double-entry for recording depreciation expense?

• Debit Depreciation Expense, Credit Accumulated Depreciation.

• Debit Accumulated Depreciation, Credit Depreciation Expense.

• Debit Cash, Credit Depreciation Expense.

• Debit Depreciation Expense, Credit Cash.

Which of the following best describes the term "ledger" in double-entry bookkeeping?

• A book where all transactions are initially recorded.

• A summary of all accounts and their balances.

• A financial statement showing profit and loss.

• A record of all cash transactions.