DOUBLE-ENTRY BOOKKEEPING
QUESTIONS WITH COMPLETE
SOLUTIONS
Define double entry - ANSWER-A method of recording transactions in ledger accounts
so that the monetary value of the debits and credits always balance each other
Double entry forms the basis of reporting business transactions in accounting systems.
Every business transactions is entered twice in the books of the accounts. One account
receives the value of the transaction and the other account loses the value of the
transaction. Traditionally the books of the account were divided into two parts, what is
the left hand side and what is the right hand side known as? - ANSWER-The left hand
side is the debit side and the right hand side is the credit side
Define debit - ANSWER-An entry on the left hand side of an account in the double entry
bookkeeping that denotes an expense in the profit and loss account or an asset in the
balance sheet
Define credit - ANSWER-An entry on the right hand side of an account in the double
entry bookkeeping that denotes an income in the profit and loss account or a liability in
the balance sheet
To increase an asset account, what do you do? - ANSWER-Debit it
To decrease an asset account, what do you do? - ANSWER-Credit it
To increase a liability account, what do you do? - ANSWER-Credit it
To decrease a liability account, what do you do? - ANSWER-Debit it
To increase the owner's capital account, what do you do? - ANSWER-Credit it
To decrease the owner's capital account, what do you do? - ANSWER-Debit it
To increase the revenue account, what do you do? - ANSWER-Credit it
To decrease the revenue account, what do you do? - ANSWER-Debit it
To increase an expense account, what do you do? - ANSWER-Debit it
To decrease an expense account, what do you do? - ANSWER-Credit it
QUESTIONS WITH COMPLETE
SOLUTIONS
Define double entry - ANSWER-A method of recording transactions in ledger accounts
so that the monetary value of the debits and credits always balance each other
Double entry forms the basis of reporting business transactions in accounting systems.
Every business transactions is entered twice in the books of the accounts. One account
receives the value of the transaction and the other account loses the value of the
transaction. Traditionally the books of the account were divided into two parts, what is
the left hand side and what is the right hand side known as? - ANSWER-The left hand
side is the debit side and the right hand side is the credit side
Define debit - ANSWER-An entry on the left hand side of an account in the double entry
bookkeeping that denotes an expense in the profit and loss account or an asset in the
balance sheet
Define credit - ANSWER-An entry on the right hand side of an account in the double
entry bookkeeping that denotes an income in the profit and loss account or a liability in
the balance sheet
To increase an asset account, what do you do? - ANSWER-Debit it
To decrease an asset account, what do you do? - ANSWER-Credit it
To increase a liability account, what do you do? - ANSWER-Credit it
To decrease a liability account, what do you do? - ANSWER-Debit it
To increase the owner's capital account, what do you do? - ANSWER-Credit it
To decrease the owner's capital account, what do you do? - ANSWER-Debit it
To increase the revenue account, what do you do? - ANSWER-Credit it
To decrease the revenue account, what do you do? - ANSWER-Debit it
To increase an expense account, what do you do? - ANSWER-Debit it
To decrease an expense account, what do you do? - ANSWER-Credit it
