Accounting Principles Quiz

Which of the following is a feature of the double-entry accounting system?

• A) Each transaction affects only one account

• B) Each transaction affects two or more accounts

• C) Only revenue accounts are affected

• D) Only asset accounts are affected

In double-entry bookkeeping, the accounting equation is:

• A) Liabilities = Assets + Owner's Equity

• B) Assets = Liabilities + Owner's Equity

• C) Liabilities = Assets - Owner's Equity

• D) Assets = Liabilities - Owner's Equity

When an asset is purchased on credit, the accounting equation will:

• A) Increase liabilities and decrease assets

• B) Increase assets and decrease equity

• C) Increase assets and increase liabilities

• D) Increase liabilities and increase equity

Which of the following is an example of a credit entry?

• A) Purchase of office supplies on credit

• B) Payment of rent in cash

• C) Receipt of cash from a customer

• D) Withdrawal of cash by the owner

Which of the following accounts will be debited when cash is received from a customer for services rendered?

• A) Cash

• B) Accounts Payable

• C) Sales Revenue

• D) Accounts Receivable

In a T-account, the left side represents the:

• A) Credit side

• B) Debit side

• C) Both sides

• D) Neither side

Which of the following accounts is increased by a debit entry?

• A) Liabilities

• B) Equity

• C) Revenue

• D) Assets

Which of the following accounts is decreased by a credit entry?

• A) Liabilities

• B) Assets

• C) Expenses

• D) Capital

When the business pays its supplier for goods purchased on credit, the correct entry would be:

• A) Debit Accounts Payable, Credit Cash

• B) Debit Cash, Credit Accounts Payable

• C) Debit Inventory, Credit Accounts Payable

• D) Debit Cash, Credit Sales Revenue

Which of the following is not a typical result of a debit entry?

• A) Increase in assets

• B) Decrease in liabilities

• C) Increase in equity

• D) Increase in expenses