Quiz on General Rules for Debits and Credits

What does the term 'debit' mean in accounting?

• Right side

• Increase

• Decrease

• Left side

In the accounting equation, what must always be in balance?

• Equity and dividends

• Revenues and expenses

• Assets and liabilities

• Debits and credits

What is the normal balance for an asset account?

• Credit

• Debit

• Neutral

• Variable

Which account type has a normal credit balance?

• Asset

• Expense

• Liability

• Dividends

What is the accounting requirement that each transaction be recorded by an entry that has equal debits and credits called?

• Single-entry procedure

• Duality

• Balance sheet

• Equity method

Which side increases for liabilities and equity accounts?

• Both sides

• Right side

• Neither side

• Left side

What is the normal balance for a revenue account?

• Debit

• Credit

• Neutral

• Variable

What is the effect of expenses on retained earnings?

• Increase

• No effect

• Decrease

• Double

Which account type is an exception and has a normal debit balance?

• Liability

• Dividends

• Revenue

• Equity

What is the purpose of the balance sheet in accounting?

• To list all transactions

• To prove the accounting equation

• To calculate net income

• To record revenues and expenses