Accounting Basics Practice Quiz
Accounting Basics Practice Questions
Here are five true or false questions that every accountant should know the answer to. Can you get them all right?
Debits increase the balance of Liability accounts.
a) True
b) False
In a Trial Balance, the total of the Debit column must equal the total of the Credit column.
a) True
b) False
A business' Equity remains constant over time.
a) True
b) False
In modern accounting software Journal Entries don't exist. Transactions are recorded directly into the General Ledger.
a) True
b) False
In Accrual accounting, Revenue is recognized when it's earned. Not when Cash is received.
a) True
b) False
Scroll down to see the answers.
Accounting Basics Practice Question Video
You can also do the quiz in this video:
Accounting Basics Practice Answers
Here are the answers:
b) False. Debits decrease the balance of Liability accounts. Liabilities are Normal Credit Accounts so Credits increase Liabilities and Debits decrease them.
a) True. In a Trial Balance, the total of the Debit column must equal the total of the Credit column. This ensures that all entries are balanced as per the Double-Entry Accounting System.
b) False. Equity is the owner's claim on the Net Assets of a business. It changes whenever there is a movement in Net Assets.
b) False. All transactions are recorded in the General Ledger using Journal Entries. In modern accounting software, Journal Entries may be generated automatically.
a) True. Accrual accounting applies the Revenue Recognition Principle. This says that revenue should be recognized when it's earned, not when cash is received. This reflects the economic substance of transactions more accurately than Cash accounting.
Did you get everything right? Share your results in the comments below.
All in One Cheat Sheet and Practice Question Bundle
Want to learn more about Accounting? Check out my All in One Cheat Sheet and Practice Question Bundle. It's a great resource for beginners who want to nail down the basics. You can download it here.
The biggest Accounting Stuff bundle ever! This Mega Pack contains both the All in One Cheat Sheet Bundle and All in One Practice Question Bundle. After making your purchase you’ll be provided with a link to download the .zip file made up of all 48 pdfs:
All in One Cheat Sheet Bundle
Accounting Cycle Cheat Sheet
Accounting Equation Cheat Sheet
Adjusting Entries Cheat Sheet
Balance Sheet Cheat Sheet
Bank Reconciliation Cheat Sheet
Bookkeeping Basics Cheat Sheet
Cash vs Accrual Accounting Cheat Sheet
Closing Entries Cheat Sheet
Debits and Credits Cheat Sheet
Depreciation Cheat Sheet
Direct Method (Cash Flow Statement) Cheat Sheet
Efficiency Ratios Cheat Sheet
Financial Ratios Cheat Sheet
General Ledger Cheat Sheet
Income Statement Cheat Sheet
Indirect Method (Cash Flow Statement) Cheat Sheet
Inventory (Merchandising Business) Cheat Sheet
Inventory Cost Flow Assumptions Cheat Sheet
Journal Entries Cheat Sheet
Leverage Ratios Cheat Sheet
Liquidity Ratios Cheat Sheet
Perpetual vs Periodic Inventory Cheat Sheet
Price Ratios Cheat Sheet
Profitability Ratios Cheat Sheet
T-Accounts Cheat Sheet
Tax Basics Cheat Sheet
Tax Brackets Cheat Sheet
Trial Balance Cheat Sheet
All in One Practice Question Bundle
Accounting Equation Question Pack 1.pdf (2 Pages)
Accounting Equation Answer Pack 1.pdf (5 Pages)
Debit & Credit Question Pack 1.pdf (2 Pages)
Debit & Credit Answer Pack 1.pdf (4 Pages)
T-Account Question Pack 1.pdf (2 Pages)
T-Account Answer Pack 1.pdf (5 Pages)
Journal Entry Question Pack 1.pdf (2 Pages)
Journal Entry Answer Pack 1.pdf (5 Pages)
Trial Balance Question Pack 1.pdf (2 Pages)
Trial Balance Answer Pack 1.pdf (7 Pages)
Cash vs Accrual Accounting Question Pack 1.pdf (2 Pages)
Cash vs Accrual Accounting Answer Pack 1.pdf (5 Pages)
Income Statement Question Pack 1.pdf (2 Pages)
Income Statement Answer Pack 1.pdf (6 Pages)
Balance Sheet Question Pack 1.pdf (2 Pages)
Balance Sheet Answer Pack 1.pdf (6 Pages)
Cash Flow Statement Question Pack 1.pdf (2 Pages)
Cash Flow Statement Answer Pack 1.pdf (6 Pages)
Adjusting Entry Question Pack 1.pdf (2 Pages)
Adjusting Entry Answer Pack 1.pdf (6 Pages)
Our digital products are copyright © Accounting Stuff Pty Ltd. They are for personal use by the original purchaser only. We do not allow our digital products to be reproduced or distributed elsewhere.
Feel free to print, annotate and add them to your notes.
All prices are in USD.