Double Entry Accounting

A clothing shop buying T-shirts for resale and paying by cheque will make a debit entry to purchases and a credit entry to the bank account

• True
• False

A clothing shop buying a computer for use in the business and paying by cheque will make a debit entry to the purchases account and a credit entry to bank account.

• True
• False

A computer shop "PC Universe" sells a computer to a customer who pays by debit card. The double-entry will be a debit to the bank account and a credit to the sales account.

• True
• False

Credit sales is the term given to sales made to customers who pay straight away.

• True
• False

When a credit sale is made, the double-entry account entries are a debit to the trade receivable's account and a credit to sales account.

• True
• False

When a business returns goods bought on credit to a supplier, the double entry account entries in the books of the business returning the goods are a debit to the trade payable's account and a credit to purchases returns (returns outwards) account.

• True
• False

When a customer of a business pays off his or her account with a cheque, the double entry account entries are a debit to the trade receivable's account and a credit to the bank account.

• True
• False

When a customer returns goods that have been bought on credit, the double-entry account entries in the books of the business who supplied the goods are a debit to the trade receivable's account and a credit to the sales returns (returns inwards) account.

• True
• False

In double-entry book-keeping debits include entries to increase the following accounts purchases, sales returns, drawings and money paid out of the bank.

• True
• False

In double-entry book-keeping credits include entries to the following accounts: sales, purchase returns, discount received and rent income.

• True
• False