Accounting Transactions Quiz

What is the primary purpose of a journal in accounting?

• To summarize financial statements

• To record transactions in chronological order

• To calculate taxes owed

• To manage payroll

What does 'debit' refer to in accounting?

• A decrease in income

• An increase in assets or expenses

• An increase in liabilities

• A decrease in equity

Which document is NOT typically considered a source document?

• Cash memo

• Invoice

• Bank statement

• Purchase bill

What is the first step in the accounting process?

• Closing the books

• Analyzing accounts

• Preparing financial statements

• Recording transactions

Which of the following is considered a liability?

• Accounts receivable

• Inventory

• Accounts payable

• Cash

What is the purpose of a trial balance?

• To prepare tax returns

• To ensure that debits equal credits

• To summarize cash flow

• To analyze profit margins

Which accounting principle requires expenses to be matched with revenues?

• Revenue recognition principle

• Matching principle

• Cost principle

• Conservatism principle

What does 'credit' refer to in accounting?

• An increase in liabilities

• A decrease in equity

• An decrease in liabilities

• An increase in income