Accounts Classification: Debit And Credit Quiz!

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

Owned by business for long-term use.

Owned by business for long-term use.

Goods bought for resale by the business.

Physical cash is something that the business owns

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

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

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

Recurring payments for renting (using) a place.

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

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.

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.

Selling price of the goods sold to customers.

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

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.

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

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

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

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.