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Understanding Double Entry Accounting

Authored by Linda Shiaw

Business

10th Grade

Used 1+ times

Understanding Double Entry Accounting
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8 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the primary purpose of double entry accounting?

To ensure that all transactions are recorded twice for accuracy

To provide a complete record of all transactions by recording both debit and credit entries

To simplify the accounting process by using a single entry system

To reduce the number of accounts needed in the ledger

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In double entry accounting, what does a debit entry typically signify?

An increase in liabilities

An increase in assets

A decrease in expenses

A decrease in revenue

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the effect of a credit entry on an expense account?

It increases the expense

It decreases the expense

It has no effect

It transfers the expense to a liability

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the primary rule for recording transactions in double entry accounting?

Every transaction must be recorded in at least two accounts

Every transaction must be recorded in a single account

Transactions should only be recorded if they involve cash

Transactions should be recorded at the end of the financial year

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the effect of a debit entry on a liability account?

It increases the liability

It decreases the liability

It has no effect

It transfers the liability to an asset

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In double entry accounting, what does a credit entry typically signify?

An increase in assets

An increase in liabilities

A decrease in equity

A decrease in revenue

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is a fundamental accounting equation?

Revenue = Expenses + Profit

Assets = Liabilities + Equity

Cash = Revenue - Expenses

Liabilities = Assets - Equity

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