Double Entry Bookkeeping Test

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The receipt of rent paid by a renter necessitates entries in the bank account and the

Correct! Wrong!

Explanation:
Rent Receivable is an asset account in a landlord's general ledger that shows the amount of rent that has been earned but not yet received as of the balance sheet date.

The account's name is always at the top.

Correct! Wrong!

The correct answer:
True

Payment of insurance through the bank necessitates the creation of two separate accounts.

Please select 2 correct answers

Correct! Wrong!

The correct answer:
Rent Account
Bank Account

The debit side of the double entry account is on the right.

Correct! Wrong!

Explanation:
The debit and credit sides of a double-entry are equal and corresponding. The debit side is on the left, and the credit side is on the right.

The DEBIT entry is always made on the ____ side of the ledger.

Correct! Wrong!

Explanation:
The DEBIT entry is always made on the left side of the ledger.

Payments to a bank account can take the form of:

Correct! Wrong!

The correct answer:
Sales

You must ignore how banks refer to debits and credits while utilizing double-entry accounting.

Correct! Wrong!

The correct answer:
True

Because__________, a double-entry system is more accurate.

Correct! Wrong!

Explanation:
The accounting system is a double-entry system, meaning that every business transaction that needs to be documented or recorded has two effects. Because of the following factors, this system is more accurate:
Misappropriation is minimized: Every transaction is first categorized into assets, liabilities, expenses, revenue, and capital, then recorded properly, allowing for the detection of any misappropriations.
To check for arithmetic mistakes in records, do the following: The dual entry principle, which states that for every debit, there is an equal and equivalent credit amount, underpins the double-entry bookkeeping system. This debit and credit system aids in assuring the arithmetical accuracy of transaction records.
Fraudulent opportunities are reduced: Accounting records assist firms in detecting frauds and errors that have occurred in the course of business and taking steps to prevent them from happening again. Mistakes and deflections can be caught using this approach, putting moral pressure on the accountant and his team.

The definition of the double-entry principle.

Correct! Wrong!

Explanation:
The dual principle underpins the double-entry accounting system. Every commercial transaction has two effects: one that reflects the debit and the other that reflects the credit. There will be a credit for every debit and vice versa.

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