Accounting Concepts And Recording

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| Written by Karen Swift

Karen Swift

Community Contributor

Quizzes Created: 10 | Total Attempts: 1,395

Questions: 10 | Attempts: 55 | Updated: May 24, 2023

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Questions and Answers

1.

Motor vehicles are assets and what by nature?
2.

Electricity is an expense and what by nature?

Explanation
Electricity is an expense because it represents a cost or outgoing payment for a company or individual. By nature, expenses are recorded as debits in accounting. A debit entry increases an expense account, reflecting the decrease in financial resources due to the expense incurred. Therefore, the correct answer is debit.

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3.

An increase in inventory will be recorded in which column?
- A.
  
  Debit
- B.
  
  Credit
Correct Answer
A. Debit

Explanation
An increase in inventory will be recorded in the debit column because it represents an asset. When inventory is purchased or acquired, it is considered an increase in assets, which is recorded on the debit side of the accounting equation. The debit column is used to record increases in assets and expenses, while the credit column is used to record decreases in assets and revenues. Therefore, an increase in inventory is recorded in the debit column.

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4.

A decrease in capital will be recorded in which column?
- A.
  
  Debit
- B.
  
  Credit
Correct Answer
A. Debit

Explanation
A decrease in capital will be recorded in the debit column because capital is an owner's equity account and any decrease in owner's equity is recorded as a debit entry. Debit entries increase assets or decrease liabilities and owner's equity, while credit entries decrease assets or increase liabilities and owner's equity. Since a decrease in capital represents a decrease in the owner's equity, it will be recorded as a debit entry.

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5.

An increase in sales will be recorded in which column?
- A.
  
  Debit
- B.
  
  Credit
Correct Answer
B. Credit

Explanation
An increase in sales will be recorded in the credit column because sales represent revenue generated by a business. In accounting, revenues are recorded as credits, indicating an increase in the company's overall income. Conversely, debits are used to record expenses and decreases in assets or liabilities. Therefore, an increase in sales would be reflected as a credit entry in the financial statements.

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6.

An increase in cash in hand will be recorded in which column?
- A.
  
  Debit
- B.
  
  Credit
Correct Answer
A. Debit

Explanation
An increase in cash in hand will be recorded in the debit column because the debit side of an account represents the increases in assets. Cash is considered an asset, and when there is an increase in cash, it is recorded on the debit side to reflect the increase in the asset.

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7.

A decrease in bank overdraft will be recored in which column?
- A.
  
  Debit
- B.
  
  Credit
Correct Answer
A. Debit

Explanation
A decrease in bank overdraft will be recorded in the debit column because a bank overdraft represents a liability for the company. When the bank overdraft decreases, it means that the company has repaid some of its debt, which is a reduction in the liability. In accounting, decreases in liabilities are recorded in the debit column.

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8.

An increase in mortgage will be recorded in which column?
- A.
  
  Debit
- B.
  
  Credit
Correct Answer
B. Credit

Explanation
An increase in mortgage will be recorded in the credit column because mortgages are liabilities, and liabilities are typically recorded on the credit side of the accounting equation. When a mortgage increases, it means that the company owes more money, which increases its liabilities. Therefore, the increase in mortgage will be recorded as a credit entry in the accounting records.

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9.

An increase in furniture will be recorded in which column?
- A.
  
  Debit
- B.
  
  Credit
Correct Answer
A. Debit

Explanation
An increase in furniture will be recorded in the debit column because the debit column is used to record increases in assets. Furniture is considered an asset, so any increase in furniture would be recorded on the debit side of the accounting ledger.

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Accounting Concepts And Recording

Motor vehicles are assets and what by nature?

Electricity is an expense and what by nature?

An increase in inventory will be recorded in which column?

A decrease in capital will be recorded in which column?

An increase in sales will be recorded in which column?

An increase in cash in hand will be recorded in which column?

A decrease in bank overdraft will be recored in which column?

An increase in mortgage will be recorded in which column?

An increase in furniture will be recorded in which column?