Methods of Accounting

Which of the following systems uses only one account for each transaction?

• Single entry system

• Double entry system

• Both a and b

• None of the above

Which of the following systems uses two accounts for each transaction?

• Single entry system

• Double entry system

• Both a and b

• None of the above

Which of the following is a disadvantage of the single entry system?

• It does not provide a complete picture of the financial health of the business.

• It is more complex than the double entry system.

• It is more time-consuming than the double entry system.

• None of the above

Which of the following is a disadvantage of the double entry system?

• It requires more time to maintain than the single entry system.

• It is more prone to errors than the single entry system.

• It is more complex than the single entry system.

• None of the above

Which of the following is an example of a transaction recorded in both the cash and accounts payable accounts in the double entry system?

• Purchase of inventory on credit

• Sale of inventory for cash

• Payment of rent in cash

• None of the above

In which system, a trial balance is not prepared?

• Single entry system

• Double entry system

• Both a and b

• None of the above

In double entry system, which account is credited when a business receives cash from customers?

• Cash account

• Accounts receivable account

• Sales account

• None of the above

Which of the following is an example of a transaction recorded in both the cash and sales accounts in the double entry system?

• Payment of rent in cash

• Purchase of inventory on credit

• Sale of inventory for cash

• None of the above

Which of the following statements is true about the double entry system?

• It records only cash transactions.

• It is used primarily by small businesses.

• It records both cash and non-cash transactions.

• None of the above

In the double entry system, which account is debited when a business pays cash to suppliers?

• Accounts payable account

• Cash account

• Purchases account

• None of the above