Multiple Choice And Short Answer Questions On Accounting
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1. The left side of an account is:a. blankb. a description of the accountc. the debit sided. the balance of the account
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The debit side
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The balance of the account
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About This Quiz
This quiz assesses key concepts in accounting, focusing on the structure and function of accounts. It covers topics like debit and credit sides, the nature of T-accounts, and the impact of credits on account balances, essential for learners in accounting.
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2. Which one of the following is not a part of an account?a. Credit sideb. Trial balancec. Debit sided. Title
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Trial Balance
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Title
Correct Answer
A. Trial BalanceExplanation
The correct answer is Trial Balance because a Trial Balance is not a specific part of an account. It is a statement that lists the balances of all the accounts in the general ledger, showing the total debits and credits. It is used to ensure that the total debits equal the total credits in the financial records. On the other hand, the credit side, debit side, and title are all components or aspects of an account.Rate this question:
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- 3.
3. An account is a part of the financial information system and is described by all except which one of the following?a. An account has a debit and credit sideb. An account is a source documentc. an account may be part of a manual or a computerized accounting systemd. An account has a title
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An account is a source document
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An account has a title
Correct Answer
A. An account is a source documentExplanation
An account is not a source document. Source documents are the original records that provide evidence of a transaction, such as invoices, receipts, or bank statements. An account, on the other hand, is a record that summarizes the financial transactions related to a particular asset, liability, equity, revenue, or expense. It includes a title, debit and credit sides, and may be part of a manual or computerized accounting system.Rate this question:
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4. The right side of an accounta. is the correct sideb. reflects all transactions for the accounting periodc. shows all the balances of the accounts in the systemd. is the credit side
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Is the credit side
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Balance side
Correct Answer
A. Is the credit sideExplanation
The correct answer is "is the credit side". In accounting, each account has two sides: the left side is called the debit side, and the right side is called the credit side. The credit side of an account represents increases in liabilities, revenues, and capital, and decreases in assets and expenses. Therefore, the right side of an account is referred to as the credit side.Rate this question:
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- 5.
5. A T-account isa. A way of showing the basic form of an accountb. what the computer uses to organize bytes of informationc. a special account used instead of a trial balanced. used for accounts that have both a debit and credit balance
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A way of showing the basic form of an account
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None of the above
Correct Answer
A. A way of showing the basic form of an accountExplanation
The correct answer is "A way of showing the basic form of an account." A T-account is a visual representation of an account that shows the debit and credit sides of the account. It is called a T-account because it resembles the letter "T", with the left side representing the debit side and the right side representing the credit side. This format allows for easy understanding and analysis of transactions and balances in an account.Rate this question:
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- 6.
6. Creditsa. decrease both assets and liabilitiesb. decrease assets and increase liabilitiesc. increase both assets and liabilitiesd. increase assets and decrease liabilities
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Decrease assets and increase liabilities
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None of the above
Correct Answer
A. Decrease assets and increase liabilitiesExplanation
The correct answer is "decrease assets and increase liabilities". This means that when credits are recorded, it results in a decrease in the value of assets and an increase in the value of liabilities. This is because credits represent amounts owed by the business to its creditors, which increases the liabilities. At the same time, the assets decrease because the business has to pay off its debts.Rate this question:
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- 7.
7. A debit to an asset account indicatesa. an errorb. a credit was made to a liability accountc. a decrease in the assetd. an increase in the asset
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An increase in the asset
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None of the above
Correct Answer
A. An increase in the assetExplanation
A debit to an asset account indicates an increase in the asset. In accounting, debiting an asset account means that there has been an inflow or addition to that asset. This could be due to various reasons such as a purchase of an asset, an increase in the value of an asset, or receipt of cash from a customer. Therefore, option d, an increase in the asset, is the correct explanation for a debit to an asset account.Rate this question:
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- 8.
8. The normal balance of any account is thea. left sideb. right sidec. side which increases that accountd. side which decreases that account
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Side which increases that account
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Only one above
Correct Answer
A. Side which increases that accountExplanation
The normal balance of any account is the side which increases that account. This means that for assets, expenses, and losses, the normal balance is on the left side, while for liabilities, equity, and revenues, the normal balance is on the right side. When transactions are recorded, increases to assets, expenses, and losses are debited, while increases to liabilities, equity, and revenues are credited. Therefore, the side which increases the account determines its normal balance.Rate this question:
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- 9.
9. A credit is not the normal balance for which account listed below?a. Capital accountb. Revenue accountc. Liability accountd. Drawing account
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Drawing account
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An asset account
Correct Answer
A. Drawing accountExplanation
The normal balance for a drawing account is a debit, not a credit. A drawing account is used to track withdrawals made by the owner of a business. Since withdrawals decrease the owner's equity, they are recorded as debits. Therefore, a credit is not the normal balance for a drawing account.Rate this question:
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10. A debit is not the normal balance for which account listed below?a. Drawingb. Cashc. Accounts Receivabled. Service Revenue
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Service Revenue
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Accounts Payable
Correct Answer
A. Service RevenueExplanation
The normal balance for an account refers to whether an increase in that account is recorded as a debit or a credit. In the case of Service Revenue, the normal balance is a credit. This means that when there is an increase in Service Revenue, it is recorded as a credit entry. The other accounts listed (Drawing, Cash, and Accounts Receivable) all have normal balances as debits, meaning that an increase in those accounts is recorded as a debit entry.Rate this question:
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Current Version
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Mar 20, 2023Quiz Edited by
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Oct 01, 2010Quiz Created by
Mmccloe
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