CPB / BookKeeping Double Entry Bookkeeping 4

Question 1

A note payable of $5,000 is issued in exchange for equipment. This transaction affects:

Accepted Answer

An asset and a liability account

Answer

Issuing a note to acquire equipment increases an asset (Equipment) and increases a liability (Notes Payable).

Question 2

Which bookkeeping error would still result in a balanced trial balance?

Accepted Answer

Debiting the wrong account for the right amount

Answer

Debiting the wrong account for the correct amount is an error of commission that keeps the trial balance balanced because total debits still equal total credits.

Question 3

The process of transferring journal entry amounts to the appropriate ledger accounts is called:

Accepted Answer

Posting

Answer

Posting is the step in the accounting cycle where amounts from the general journal are transferred to the individual ledger accounts.

Question 4

If a company collects $900 on an account receivable previously recorded, the entry is:

Accepted Answer

Debit Cash, Credit Accounts Receivable

Answer

Collecting a receivable increases Cash (debit) and decreases Accounts Receivable (credit); no new revenue is recognized.

Question 5

Under double entry bookkeeping, every journal entry must have:

Accepted Answer

At least one debit and at least one credit

Answer

Every journal entry must have at least one debit and at least one credit, but compound entries can have multiple debits or credits as long as totals are equal.

CPB / BookKeeping Practice Test

CPB / BookKeeping Practice Test

CPB / BookKeeping Double Entry Bookkeeping 4