Quiz 1: IGCSE General Ledger Accounting and Double-entry Quiz

What is the correct accounting equation?

• Assets = Liabilities + Income

• Assets = Liabilities + Capital

• Assets = Liabilities - Capital

• Assets = Liabilities × Capital

The double-entry system means every transaction affects at least two accounts.

• True

• False

When an asset increases, it is recorded on the ______ side of the account.

If a business takes out a loan from the bank, how will this affect the accounting equation?

• Increase assets and decrease capital

• Increase liabilities and decrease assets

• Increase assets and increase liabilities

• Increase capital and decrease liabilities

Which of the following is a liability?

• Inventory

• Bank Loan

• Cash

• Equipment

A business purchases equipment for cash. Which two accounts are affected?

• Equipment and Capital

• Equipment and Cash

• Equipment and Liabilities

• Cash and Revenue

When a liability decreases, it is recorded as a debit.

• True

• False

A customer pays cash for goods sold. How will this transaction affect the accounting equation?

• Increase assets and decrease liabilities

• Increase assets and increase equity

• Decrease assets and increase liabilities

• Decrease liabilities and increase equity

In the double-entry system, every debit must have a corresponding ______.