Accounts Classification: Debit And Credit Quiz!

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| By Arshad.b.jumah

Arshad.b.jumah

Community Contributor

Quizzes Created: 3 | Total Attempts: 789

Questions: 20 | Attempts: 481 | Updated: Mar 22, 2023

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Accounts Classification: Debit And Credit Quiz! - Quiz

What do you know about account classification? In accounting, the accounts are categorized using one of the two approaches, including a modern or traditional approach. There are five key types of accounts, including assets, liabilities, equity, revenue, and expenses. The debit and credit record your expenditures and income. The goal is to clarify how your company’s money is spent or received. If you want to put your knowledge to the test, this is the quiz for you.

Questions and Answers

1.

Cash in hand
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
Physical cash is something that the business owns

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2.

Cash at bank
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
Money kept in the bank account is owned by the business.

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3.

Trade receivable
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
Owings by customers to the business. Business will receive $ from customers in future.

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4.

Salaries
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
Payments (of $) to be made to workers in the business.

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5.

Equipment
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
Owned by business for long-term use.

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6.

Motor Vehicles
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
Owned by business for long-term use.

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7.

Interest income
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
B. Cr

Explanation
Earnings calculated as a percentage of money kept in the bank.

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8.

Inventory
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
Goods bought for resale by the business.

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9.

Stationery
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
As the value of stationery is low, it is classified as an expense instead. [Materiality concept]

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10.

Rent
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
Recurring payments for renting (using) a place.

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11.

Trade payables
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
B. Cr

Explanation
Owings by the business to the supplier. Business will pay supplier in future.

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12.

Sales revenue
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
B. Cr

Explanation
Selling price of the goods sold to customers.

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13.

Cost of sales
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
Cost price of the goods sold. Recorded only when the business sells the goods.

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14.

Discounts received
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
B. Cr

Explanation
Given by credit supplier (creditor/trade payables) to business to encourage early payment of cash. Given at the point of payment.

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15.

Discounts allowed
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
Given to credit customer (debtor/trade receivables) by business to encourage early payment of cash. Given at the point of payment.

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16.

Sales Returns
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr
17.

Loss on sale of equipment
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
The given correct answer is "Dr" because when a company sells equipment, it usually results in a loss. The loss on the sale of equipment is recorded as a debit (Dr) in the accounting books to reflect the decrease in the company's assets. This loss is typically recognized when the sale price of the equipment is lower than its book value or carrying amount. By debiting the loss on sale of equipment, the company acknowledges the reduction in its financial position due to the sale.

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18.

Commission revenue
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
B. Cr

Explanation
The given correct answer "Cr" suggests that commission revenue is a credit entry. In accounting, revenue accounts are typically credited when they increase. Commission revenue represents the income earned by a business from commissions, which are fees received for facilitating a sale or transaction. Therefore, when commission revenue is recorded, it is credited to reflect the increase in income.

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19.

Capital
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
B. Cr

Explanation
The given answer "Cr" is an abbreviation for "Credit". In accounting, "Credit" refers to an entry on the right side of a ledger account, indicating a decrease in assets or an increase in liabilities or equity. The "Cr" notation is commonly used to represent credit entries in financial transactions.

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20.

Drawings
- A.
  
  Dr
- B.
  
  Cr
Correct Answer
A. Dr

Explanation
The given answer "Dr" is most likely an abbreviation for "Debit". In accounting, "Dr" represents the left side of a journal entry, indicating an increase in assets or a decrease in liabilities or equity. This is the opposite of "Cr" which stands for "Credit", representing the right side of a journal entry, indicating a decrease in assets or an increase in liabilities or equity. Without further context or information, it is difficult to provide a more specific explanation.

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