T-Account Practice Quiz
T-Accounts: 20 Practice Questions for Beginners
How well do you know T-Accounts? Let’s find out!
In this video, I’ll test your understanding of T-Accounts with 20 multiple choice questions.
We’ll start with the basics, but don’t get too comfortable, things will get tougher fast. So grab a pen, keep score, and remember to share your result in the comments at the end.
An Account is a place where a business ______ . Can you fill in the blank?
a) Lists all of its transactions in chronological order
b) Records, sorts & stores all transactions affecting a related group of items
c) Summarizes its total revenue and expenses
d) Keeps copies of customer invoices
A T-Account is a _____ representation of an account. Can you fill in the blank?
a) Special
b) Digital
c) Verbal
d) Visual
What does the “T” in T-Account represent?
a) The name of the transaction
b) The total balance
c) The shape used to record entries
d) The Trial Balance
The Account Name goes on the ______ of a T-Account. Can you fill in the blank?
a) Top
b) Bottom
c) Left
d) Right
Credits are recorded on the ______ of a T-Account. Can you fill in the blank?
a) Top
b) Bottom
c) Left
d) Right
Debits are recorded on the ______ of a T-Account. Can you fill in the blank?
a) Top
b) Bottom
c) Left
d) Right
The balance of a T-Account is calculated by ______ . Can you fill in the blank?
a) Adding all debits
b) Adding all credits
c) Adding both sides together
d) Subtracting the smaller side from the larger side
If the credit side of a T-Account is greater than the debit side, the account has a ______ . Can you fill in the blank?
a) Debit balance
b) Credit balance
c) Normal balance
d) Zero balance
If the debit and credit sides of a T-Account are equal, the account has a ______ . Can you fill in the blank?
a) Debit balance
b) Credit balance
c) Normal balance
d) Zero balance
Which type of T-Account has a normal balance on the left side?
a) Assets
b) Liabilities
c) Equity
d) Revenue
Which type of T-Account has a normal balance on the right side?
a) Assets
b) Dividends
c) Revenue
d) Expenses
Where would you expect to find the opening balance of a Marketing Expenses T-Account?
a) Left
b) Right
Which side of a T-Account is used to record an increase in Accounts Payable?
a) Left
b) Right
Which side of a T-Account is used to record a decrease in Common Stock?
a) Left
b) Right
Which side of a T-Account is used to record a decrease in Inventory?
a) Left
b) Right
Which side of a T-Account is used to record an increase in Dividends declared?
a) Left
b) Right
Where would you expect to find the closing balance of a Service Revenue T-Account?
a) Left
b) Right
A business has an opening balance of $2,000 in Accounts Receivable. During the month, they receive a $500 payment from a customer. What is the closing balance of the T-Account?
a) $500 on the left
b) $1,500 on the left
c) $2,500 on the left
d) $1,500 on the right
A business has an opening balance of $12,000 in Sales Revenue. During the month, they earn $5,000 in revenue and close the account. What is the closing balance of the T-Account?
a) $5,000 on the right
b) $17,000 on the right
c) $17,000 on the left
d) $0
A business has a closing balance of $9,000 in Accounts Payable. During the month, they purchased $4,000 of goods on credit and paid out $2,500 to suppliers. What was the opening balance of the T-Account?
a) $7,500 on the right
b) $7,500 on the left
c) $6,500 on the right
d) $10,500 on the right
Bonus Question! If Total Debits in all T-Accounts equal Total Credits, what does this tell you?
a) The business has generated a profit
b) All transactions have been recorded correctly
c) No errors exist in the accounts
d) The Accounting Equation is in balance
Scroll down to see the answers.
T-Account Cheat Sheet
Download my T-Account Cheat Sheet here. It has all the key points you need to know.
T-Account Practice Answers
These are the answers:
b) Records, sorts & stores all transactions affecting a related group of items. An account tracks increases and decreases for a specific category, like Cash or Accounts Payable.
d) Visual. A T-Account is a visual representation of an account. It shows you how debits and credits affect each side.
c) The shape used to record entries. It's called a T-Account because it's shaped like the letter "T".
a) Top. The account name is written at the top of the T-Account.
d) Right. Credits always go on the right side of a T-Account.
c) Left. Debits go on the left, and Credits go on the right of a T-Account.
d) Subtracting the smaller side from the larger side. To find the balance of a T-Account, add up each side and subtract the smaller total from the larger total. The difference represents the account’s remaining balance.
b) It would have a credit balance.
d) Zero balance. When total debits and credits are equal, they cancel each other out — leaving the account with a zero balance.
a) Assets are represented by the "A" in DEALER, making them Normal Debit Accounts. We'd expect to find their balance on the left (debit) side of the T-Account.
c) Revenue accounts represented by the "R" in DEALER, which means they're Normal Credit Accounts, so their balance appears on the right (credit) side of the T-Account.
a) Left. Marketing Expenses are a type of Expense, so they're represented by the first "E" in DEALER. This means they are Normal Debit Accounts, so their opening balance would be on the left (debit) side of the T-Account.
b) Right. Accounts Payable is a type of Liability. It's represented by the "L" in DEALER, so it's a Normal Credit Account. This means credits would increase it on the right side of the T-Account.
a) Left. Common Stock is an Equity account, represented by the second "E" in DEALER, so it's a Normal Credit Account. This means we'd debit Common Stock on the left side of the T-Account to decrease it.
b) Right. Inventory is a type of Asset, so it's a Normal Debit Account. This means we would credit Inventory on the right side of the T-Account to decrease it.
a) Left. Dividends is represented by the "D" in DEALER, so it's a Normal Debit Account. That means increases are recorded on the left (debit) side of the T-Account.
b) Right. Service Revenue is a type of Revenue, so it's a Normal Credit Account. So we'd expect to find its closing balance on the right (credit) side of the T-Account.
b) $1,500 on the left. Accounts Receivable is an Asset, which means it’s a Normal Debit Account. It starts with a $2,000 balance on the left of the T-Account. When the business receives the $500 payment, they credit the right side to reduce the amount owed — leaving a $1,500 balance on the left (debit) side.
d) $0. This is a trick question. After earning the $5,000, the total credit balance of Sales Revenue becomes $17,000. But when the account is closed, it’s debited by $17,000. The balance is transferred to the Income Summary account, leaving Sales Revenue which a closing balance of zero.
a) $7,500 on the right. Accounts Payable is a Liability account with a Normal Credit Balance. We know the business bought $4,000 of goods on credit — that increases the account. They also paid out $2,500 to suppliers — which would decrease it. To finish with a closing balance of $9,000, the opening balance must have been $7,500 on the right (credit) side of the T-Account.
d) The Accounting Equation is in balance. When Total Debits equal Total Credits, it shows that the business's Assets are equal to its Liabilities plus Equity. This means the Accounting Equation is balanced, though errors may still exist.
How did you go? Let us know in the comments below.
T-Accounts Video Tutorial
Do you want to learn more about T-Accounts? I explain how they work in this video:
In this video, I'll attempt to explain T-Accounts in less than two minutes.