Double Entry System trivia

Which of the following is a fundamental principle of the double entry system?

• Only income and expenses are recorded

• Each credit doesn't have to be matched with a debit

• Each credit must be matched with a debit

Identify the two main types of accounts in the transaction: Bought inventory on credit for $500

• Liabilities and capital

• Assets and liabilities

• Liabilities and capital

What does the debit side of a liability double entry represent?

• Decrease

• Increase

• Decrease and Increase

What is the double entry system in accounting?

• A system where each transaction affects at least 2 accounts

• A system where every transaction is recorded in one account

• A system that only records expenses and capital

Use the double entry system to record the owner's investment in the business. What is the correct entry?

• Capital(Debit),Cash(Debit)

• Cash(Debit),Capital(Credit)

• Accounts payable(Debit), Capital (Credit)

Apply the double entry system to the purchase of motor vehicles on credit. Which accounts are affected?

• Motor vehicles(Debit),Accounts payable(Credit)

• Motor vehicles(Debit),Cash(Credit)

• Motor vehicles(Debit).Capital(Credit)

Use the double entry system to record the purchase of equipment on credit.

• Equipment(Credit),Cash(Credit)

• Equipment(Debit),Accounts payable(Credit)

• Equipment(Debit),Cash(Credit)

Demonstrate the double entry system for receiving cash from a customer for a previous sale.

• Cash(Debit),Accounts receivable(Credit)

• Accounts receivable(Debit),Cash(Credit)

• Cash(Debit),Sales(Credit)

Explain the role of debits and credits in the double entry system.

• Debits are recorded only at the beginning of the month and credits at the end

• Debits and credits are only used for liabilities

• Debits and credits are used to record increases and decreases in all accounts

Out of the following which is always CREDITED?

• Liabilities

• Assets

• Capital