Accounting Basics Quiz

What is the main purpose of preparing a trial balance?

• To find profits

• To calculate taxes

• To verify if debits equal credits

• To create ledger accounts

Which format is used to record business transactions?

• Only credit

• Only debit

• Double entry

• Single entry

What is included in a journal entry?

• Cash flow

• Income details

• Date, amount, account titles, narration

• Account number only

Where are the initial business transactions recorded?

• Ledger

• Income statement

• Journal

• Balance sheet

Which account shows how much customers owe you?

• Capital

• Sales

• Receivables

• Cash

What type of account is Capital?

• Asset

• Liability

• Equity

• Expense

How often is trial balance usually prepared?

• Daily

• Weekly

• End of period

• Hourly

What happens if debit and credit totals in trial balance do not match?

• Nothing changes

• Trial balance is complete

• There is an error

• Close the account

What is the result of double entry system?

• Trial loss

• Financial crisis

• Balanced records

• Increased profit

In double entry, every debit must have a...

• Receipt

• Document

• Credit

• Voucher