This journal entry quiz consists of 10 items designed to test your knowledge of debits and credits in accounting.
Set A – Accounting Background
True or False?
1. The recording process becomes more efficient and informative if all transactions are recorded only in one account.
2. A debit to an account indicates an increase in that account.
3. An account is often to as a T-account because of the way it is constructed.
4. The normal balance of an account is a debit.
5. Under the double-entry system, total debits shall equal to total credits made.
6. All business transactions must be entered first in the general ledger.
7. A journal is also known as the book of original entry.
8. The trial balance will not balance when incorrect account descriptions are used in journalizing or posting.
9. Transactions are recorded chronologically in the journal.
10. A simple journal entry has one debit and credit to an account.
- False – it would be hard to understand and analyze if various transactions of dissimilar nature are lumped in only one account.
- False – assets and expenses will increase with debit but not for liabilities, equity, and revenue.
- True – because the bookkeeping entries are laid out in a way that resembles a T-shape.
- False – the normal balance of accounts for revenue, liabilities, and equity is credit.
- False – journal entries shall be recorded first in the journal.
- False – incorrect transaction descriptions will not make the trial balance not balance.
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