Bookkeeping Quiz
Questions: 16 · 10 minutes
1. In a sole proprietorship, the owner withdraws business cash for personal use. Which entry is appropriate?
Debit Wages Expense; credit Cash
Debit Owner's Drawings; credit Cash
Debit Owner's Capital; credit Sales Revenue
Debit Cash; credit Owner's Capital
2. A business receives a utility bill that will be paid next month. Which entry records the bill when received under accrual accounting?
Debit Accounts Payable; credit Utilities Expense
Debit Utilities Expense; credit Cash
Debit Cash; credit Accounts Payable
Debit Utilities Expense; credit Accounts Payable
3. Which adjusting entry records depreciation for the period?
Debit Accumulated Depreciation; credit Depreciation Expense
Debit Equipment; credit Depreciation Expense
Debit Depreciation Expense; credit Accumulated Depreciation
Debit Depreciation Expense; credit Equipment Purchases
4. Which control most directly helps prevent the same supplier invoice from being paid twice?
Comparing this month's sales with last month's sales
Flagging repeated supplier invoice numbers before authorizing payment
Preparing a depreciation schedule before each payment run
Numbering customer receipts in sequence
5. A customer pays an invoice that was previously recorded in Accounts Receivable. Which entry records the payment?
Debit Sales Revenue; credit Accounts Receivable
Debit Accounts Receivable; credit Cash
Debit Cash; credit Sales Revenue
Debit Cash; credit Accounts Receivable
6. A customer is invoiced for services already completed and will pay later. Which entry is appropriate?
Debit Cash; credit Service Revenue
Debit Service Revenue; credit Accounts Receivable
Debit Accounts Payable; credit Service Revenue
Debit Accounts Receivable; credit Service Revenue
7. A check recorded by the business has not yet appeared on its bank statement. When reconciling from the bank statement balance, how is this outstanding check treated?
Add it to the cash balance in the ledger
Add it to the bank statement balance
Subtract it from the bank statement balance
Record it again as a cash payment
8. Which account normally carries a credit balance?
Inventory
Owner's Drawings
Accounts Payable
Rent Expense
9. At month-end, part of a prepaid insurance policy has expired. Which adjusting entry recognizes the expired portion?
Debit Insurance Expense; credit Prepaid Insurance
Debit Cash; credit Prepaid Insurance
Debit Prepaid Insurance; credit Insurance Expense
Debit Insurance Expense; credit Accounts Payable
10. A business makes a $500 cash sale. Ignoring sales tax, which entry records the sale?
Debit Sales Revenue $500; credit Cash $500
Debit Cash $500; credit Accounts Receivable $500
Debit Accounts Receivable $500; credit Cash $500
Debit Cash $500; credit Sales Revenue $500
11. Under a perpetual inventory system, a business returns goods bought on account and receives a credit from the supplier. Which entry records the return?
Debit Accounts Payable; credit Inventory
Debit Cash; credit Inventory
Debit Inventory; credit Accounts Payable
Debit Inventory; credit Cash
12. A business records a deposit late in the day, but it does not yet appear on the bank statement. When reconciling from the bank statement balance, how is this deposit in transit treated?
Add it to the bank statement balance
Subtract it from the bank statement balance
Subtract it from the cash balance in the ledger
Record it as revenue a second time
13. Why should a purchase receipt be retained as a source document?
It provides evidence of details such as the date, amount, and nature of the purchase
It proves that the purchase was included in the bank statement
It replaces the need to record the purchase in the ledger
It establishes the useful life of every item purchased
14. A consultant completes work on December 28, sends the invoice on January 3, and receives payment on January 20. Under accrual accounting, when is the revenue generally recognized?
January 20, when the cash is received
January 3, when the invoice is sent
December, when the work is completed and the revenue is earned
January 31, when the monthly bank reconciliation is prepared
15. A trial balance has equal debit and credit totals. What can the bookkeeper reasonably conclude?
Every transaction was posted to the correct account
The ledger is arithmetically balanced, although some errors may remain
All bank transactions have cleared successfully
The business earned a profit during the period
16. What is the primary function of a general ledger?
To store only the original receipts and supplier invoices
To organize the transactions and balances of all ledger accounts
To list only transactions that have cleared the bank
To forecast the business's future cash receipts and payments