BASIC BOOKKEEPING PRACTICE EXAM
QUESTIONS WITH COMPLETE SOLUTIONS
J Company has $350,000 in assets and $150,000 in liabilities. How much is equity? -
ANSWER-$200,000
A business owner pays $25,000 for a vehicle to use in the business. This transaction
increases _____ (choose asset, liability, or equity) and decreases _____ (choose asset,
liability, or equity). - ANSWER-an asset (vehicle); an asset (cash)
True or false-If a business uses a journal to record transactions, they do not need to use
a general ledger. - ANSWER-False. (Journal is used for finding transaction information
chronically, Ledger is used for finding transaction information for particular accounts.)
True or false-A debit to Cash will decrease the balance. - ANSWER-False. (Debits to
assets, like cash, increase the account balance.)
The term used to indicate transferring information from a Journal to a Ledger is _____. -
ANSWER-Posting
M Company has $300,000 in liabilities and $100,000 in equity. How much are total
assets? - ANSWER-$400,000
A business owner invests $50,000 in the business. This transaction _____ (choose
increases or decreases) total assets and _____ (choose increases or decreases) total
equity. - ANSWER-increases; increases
True or false-A credit to Accounts Payable will increase the balance. - ANSWER-True
Which of the following is increased by a Debit-accounts payable, common stock
(equity), accounts receivable, notes payable? - ANSWER-Accounts Receivable
What would the journal entry be to record a charge (i.e. will pay later when billed)
purchase of supplies? - ANSWER-Debit Supplies, Credit Accounts Payable
The normal balance for a Revenue account would be _____ (chose debit or credit). -
ANSWER-Credit
The Equipment account is _____ (choose asset, liability, or equity) and is increased
with _____ (choose debits or credits). - ANSWER-asset; debits
To help find accounts in ledgers, accountants assign numbers to them. A list of the
numbers with the account titles is called a _____. - ANSWER-Chart of Accounts
QUESTIONS WITH COMPLETE SOLUTIONS
J Company has $350,000 in assets and $150,000 in liabilities. How much is equity? -
ANSWER-$200,000
A business owner pays $25,000 for a vehicle to use in the business. This transaction
increases _____ (choose asset, liability, or equity) and decreases _____ (choose asset,
liability, or equity). - ANSWER-an asset (vehicle); an asset (cash)
True or false-If a business uses a journal to record transactions, they do not need to use
a general ledger. - ANSWER-False. (Journal is used for finding transaction information
chronically, Ledger is used for finding transaction information for particular accounts.)
True or false-A debit to Cash will decrease the balance. - ANSWER-False. (Debits to
assets, like cash, increase the account balance.)
The term used to indicate transferring information from a Journal to a Ledger is _____. -
ANSWER-Posting
M Company has $300,000 in liabilities and $100,000 in equity. How much are total
assets? - ANSWER-$400,000
A business owner invests $50,000 in the business. This transaction _____ (choose
increases or decreases) total assets and _____ (choose increases or decreases) total
equity. - ANSWER-increases; increases
True or false-A credit to Accounts Payable will increase the balance. - ANSWER-True
Which of the following is increased by a Debit-accounts payable, common stock
(equity), accounts receivable, notes payable? - ANSWER-Accounts Receivable
What would the journal entry be to record a charge (i.e. will pay later when billed)
purchase of supplies? - ANSWER-Debit Supplies, Credit Accounts Payable
The normal balance for a Revenue account would be _____ (chose debit or credit). -
ANSWER-Credit
The Equipment account is _____ (choose asset, liability, or equity) and is increased
with _____ (choose debits or credits). - ANSWER-asset; debits
To help find accounts in ledgers, accountants assign numbers to them. A list of the
numbers with the account titles is called a _____. - ANSWER-Chart of Accounts
