Accounting Basics Quiz

What are the three main types of accounts in accounting?

• revenue

• expenses

• income

• assets, liabilities, equity

In which type of account do you record assets?

• Balance sheet account

• Cash flow account

• Expense account

• Income statement account

What is the rule of debit and credit for assets?

• Credit the increase in assets, debit the decrease in assets.

• Credit the increase in assets, credit the decrease in assets.

• Debit the increase in assets, credit the decrease in assets.

• Debit the increase in assets, debit the decrease in assets.

Explain the rule of debit and credit for expenses.

• Credit all expenses and debit all income.

• Debit all expenses and credit all assets.

• Debit all expenses and credit all income.

• Credit all expenses and debit all liabilities.

How is a T-account structured?

• The left side of a T-account is for debits, and the right side is for credits.

• A T-account has only one side for recording transactions.

• A T-account is structured with debits on both sides.

• The left side of a T-account is for credits, and the right side is for debits.

What is recorded on the left side of a T-account?

• Credits

• Debits

• Liabilities

• Assets

How do you balance a T-account?

• Ensure total debits equal total credits by adding up each side and making adjustments if necessary.

• Ignore debits and focus on credits

• Subtract debits from credits

• Multiply debits by credits

When do you use a credit entry in a T-account?

• When there is an increase in liabilities, equity, or revenue, or a decrease in assets or expenses.

• When there is a change in the weather forecast.

• When there is no change in the financial position.

• When there is a decrease in liabilities, equity, or revenue, or an increase in assets or expenses.

What is the purpose of balancing T-accounts?

• To confuse accountants

• To waste time

• To increase errors

• To ensure accuracy in financial records.

Give an example of a transaction and show how it would be recorded in a T-account.

• Debit Office Supplies $500, Credit Cash $500

• Debit Equipment $300, Credit Accounts Payable $300

• Debit Rent Expense $1000, Credit Accounts Receivable $1000

• Debit Utilities Expense $200, Credit Prepaid Expenses $200