Double-Entry Bookkeeping

In double-entry bookkeeping, every transaction affects at least __________ account(s).

• one

• two

• three

• four

The fundamental principle of double-entry bookkeeping is:

• Cash is king

• Assets = Liabilities + Equity

• Every debit has a corresponding credit

• Revenue minus expenses equals profit

Which account type increases with a debit entry?

• Assets

• Liabilities

• Equity

• Revenue

Which account type increases with a credit entry?

• Assets

• Liabilities

• Equity

• Expenses

A credit entry is recorded on the __________ side of the account.

• left

• right

• top

• bottom

Which of the following represents a correct double-entry for a purchase of equipment with cash?

• Debit Cash, Credit Equipment

• Debit Equipment, Credit Cash

• Debit Equipment, Credit Accounts Payable

• Debit Cash, Credit Accounts Receivable

An increase in accounts receivable is recorded as a __________ entry.

• debit

• credit

• either debit or credit, depending on the situation

• none of the above

Which account type represents the owner's investment in the business?

• Assets

• Liabilities

• Equity

• Revenue

Which financial statement reports the financial position of a company at a specific point in time?

• Statement of Financial Position

• Statement of Profit or Loss

• Statement of Cashflows

• Statement of Changes in Equity

Which financial statement shows the revenues, expenses, and net income or loss of a company for a specific period?

• Statement of Financial Position

• Statement of Profit or Loss

• Statement of Cashflows

• Statement of Changes in Equity