Business Transaction Recording Process Quiz

What is the purpose of a T-account?

• To calculate taxes owed

• To prepare financial statements

• To manage payroll

• To record increases and decreases in specific accounts

What does debiting an account signify?

• A decrease in expenses

• An increase in revenue

• A decrease in liabilities

• An increase in assets

Which of the following is recorded on the credit side of an account?

• Increase in assets

• Decrease in liabilities

• Increase in capital

• Increase in expenses

What is the effect of purchasing goods on credit?

• Decrease in owner's equity

• Decrease in assets

• Increase in liabilities

• Increase in cash

What is a trial balance used for?

• To check arithmetical accuracy

• To prepare tax returns

• To manage inventory

• To record daily transactions

What happens when an owner withdraws cash from the business?

• Expenses increase

• Owner's equity decreases

• Liabilities increase

• Assets increase

Which account is debited when rent is paid?

• Cash at Bank

• Accounts Payable

• Owner's Equity

• Rent Expenses

What is the effect of a cash discount received?

• Increase in expenses

• Decrease in liabilities

• Decrease in assets

• Increase in revenue

What is the correct journal entry for receiving cash commission?

• Debit Cash at Bank, Credit Commission Received

• Debit Sales, Credit Cash in Hand

• Debit Commission Received, Credit Cash at Bank

• Debit Cash in Hand, Credit Sales

What does the term 'balancing off' refer to?

• Closing accounts at the end of a period

• Calculating tax liabilities

• Recording daily transactions

• Preparing financial statements