Fundamentals of Accountancy Quiz

What is the first step in the accounting process?

• Recording the transaction

• Classifying

• Identification of Transaction

• Summarizing

What does the double entry system require for every transaction?

• Two debits and one credit

• Two credits and one debit

• One debit and one credit

• One credit and one cash

Which of the following is NOT a type of account?

• Abstract Accounts

• Nominal Accounts

• Real Accounts

• Personal Accounts

What is the accounting equation?

• Liabilities = Assets + Capital

• Assets - Liabilities = Capital

• Assets + Liabilities = Capital

• Assets = Liabilities + Capital

Which type of account includes wages and rent?

• Real Accounts

• Nominal Accounts

• Personal Accounts

• Capital Accounts

What does 'Dr.' stand for in accounting?

• Deposit

• Distribution

• Deductions

• Debit

What is the purpose of a journal in accounting?

• To summarize transactions

• To record transactions chronologically

• To balance accounts

• To prepare financial statements

What is a compound journal entry?

• An entry with one debit and one credit

• An entry with multiple debits or credits

• An entry that summarizes transactions

• An entry that is incorrect

What is the main function of the ledger?

• To record transactions

• To classify and summarize transactions

• To analyze financial statements

• To prepare trial balances

What is the purpose of a trial balance?

• To analyze cash flow

• To check the arithmetic accuracy of accounts

• To record transactions

• To prepare financial statements