Quiz Game: Mastering Debits and Credits

Understanding debits and credits is essential to mastering the fundamentals of accounting. Whether you’re just starting out or need to refresh your knowledge, our beginner’s quiz will test and enhance your understanding of these crucial concepts.

Featuring 15 engaging questions, including multiple-choice, true/false, and fill-in-the-blanks, this quiz covers the basics of recording transactions in a double-entry bookkeeping system.

Why Debits and Credits Matter:

In accounting, every financial transaction involves a debit and a credit. These entries ensure that the accounting equation remains balanced and accurate, making debits and credits the foundation of the double-entry bookkeeping system.

Understanding these concepts is essential for accurate record-keeping and reporting in any business.

What You’ll Learn:

This quiz will help you:

• Understand the Rules of Debits and Credits: Know when to debit and when to credit different types of accounts (assets, liabilities, equity, etc.).
• Apply Double-Entry Bookkeeping Principles: Learn how to ensure that each transaction is recorded in at least two accounts, balancing the books.
• Recognize Common Errors: Spot mistakes in journal entries and learn how to correct them.

Quiz Format:

This beginner-friendly quiz includes:

• Multiple Choice Questions (MCQs): Test your understanding of when and how to apply debits and credits in various accounting scenarios.
• True/False Questions: Reinforce your knowledge of the basic principles of debits and credits in financial transactions.
• Fill in the Blanks: Practice recording debits and credits in real-world accounting examples.

Each question comes with detailed explanations, ensuring you understand the reasoning behind the correct answers.

Who Should Take This Quiz?

• Accounting Students: If you’re learning accounting, this quiz is a great way to test your understanding of debits and credits.
• Business Owners and Bookkeepers: Understanding debits and credits helps you keep your business finances accurate and balanced.
• Beginners: If you’re new to accounting, this quiz will provide a solid foundation in the essential rules of debits and credits.

Think you’ve got debits and credits figured out? Take the quiz now and put your accounting knowledge to the test. See if you can master the basics and take your accounting skills to the next level!

0%

---

Mastering Debits and Credits

Welcome to the "Mastering Debits and Credits" quiz! Let's see how well you understand the fundamental rules of accounting transactions. Good luck!

1 / 15

1. When a company earns revenue on credit, the Accounts Receivable account is ________.

A. Credited

B. Debited

C. Closed

D. Balanced

Incorrect. Don’t worry, review the explanation and try again!

Explanation: Accounts Receivable is debited when revenue is earned on credit, indicating that the company expects payment in the future.

Correct! You’ve got it right. Keep up the good work!

2 / 15

2. Expenses are always increased with a ________ entry.

A. Debit

B. Credit

C. Transfer

D. Adjustment

Incorrect. Don’t worry, review the explanation and try again!

Explanation: Expenses are always increased by a debit entry, as they reduce equity.

Correct! You’ve got it right. Keep up the good work!

3 / 15

3. The Cash account is ________ when money is withdrawn from the business.

A. Debited

B. Credited

C. Adjusted

D. Reconciled

Incorrect. Don’t worry, review the explanation and try again!

Explanation: Cash is credited when money leaves the business, reducing the cash balance.

Correct! You’ve got it right. Keep up the good work!

4 / 15

4. Debits increase assets, while credits increase ________.

A. Expenses

B. Liabilities and equity

C. Assets and expenses

D. Revenues and expenses

Incorrect. Don’t worry, review the explanation and try again!

Explanation: Credits increase liabilities and equity accounts in the accounting equation.

Correct! You’ve got it right. Keep up the good work!

5 / 15

5. When a business borrows money from a bank, the ________ account is credited.

A. Loan Payable

B. Cash

C. Interest Expense

D. Accounts Receivable

Incorrect. Don’t worry, review the explanation and try again!

Explanation: Loan Payable is credited to record the liability created by borrowing money.

Correct! You’ve got it right. Keep up the good work!

6 / 15

6. When cash is paid for an expense, the expense account is debited.

A. True

B. False

Incorrect. Don’t worry, review the explanation and try again!

Explanation: Expenses are debited when cash is paid, as they decrease equity.

Correct! You’ve got it right. Keep up the good work!

7 / 15

7. Liabilities are increased with a debit entry.

A. True

B. False

Incorrect. Don’t worry, review the explanation and try again!

Explanation: Liabilities increase with a credit entry, not a debit entry.

Correct! You’ve got it right. Keep up the good work!

8 / 15

8. A debit to the Accounts Receivable account indicates an increase in receivables.

A. True

B. False

Incorrect. Don’t worry, review the explanation and try again!

Explanation: A debit to Accounts Receivable shows that more money is owed to the business by customers.

Correct! You’ve got it right. Keep up the good work!

9 / 15

9. Revenue is always recorded on the credit side of a journal entry.

A. True

B. False

Incorrect. Don’t worry, review the explanation and try again!

Explanation: Revenue is credited to reflect an increase in income for the business.

Correct! You’ve got it right. Keep up the good work!

10 / 15

10. A debit entry always results in an increase in assets.

A. True

B. False

Incorrect. Don’t worry, review the explanation and try again!

Explanation: While debit entries increase assets, they can also increase expenses or decrease liabilities, depending on the type of account.

Correct! You’ve got it right. Keep up the good work!

11 / 15

11. Which type of account decreases with a debit entry?

A. Expenses

B. Revenue

C. Liabilities

D. Assets

Incorrect. Don’t worry, review the explanation and try again!

Explanation: Liabilities decrease with a debit entry as they represent obligations that are being paid or reduced.

Correct! You’ve got it right. Keep up the good work!

12 / 15

12. When a company pays off a loan, which account is debited?

A. Cash

B. Revenue

C. Accounts Payable

D. Loan Payable

Incorrect. Don’t worry, review the explanation and try again!

Explanation: The Loan Payable account is debited to reduce the liability when the loan is paid off.

Correct! You’ve got it right. Keep up the good work!

13 / 15

13. Which of the following transactions requires a debit to Cash?

A. Paying rent

B. Purchasing equipment on credit

C. Issuing dividends

D. Receiving cash from a customer

Incorrect. Don’t worry, review the explanation and try again!

Explanation: Cash is debited when it is received, increasing the cash balance.

Correct! You’ve got it right. Keep up the good work!

14 / 15

14. A credit entry to an equity account signifies:

A. A decrease in equity

B. An increase in equity

C. No effect on equity

D. A transfer between accounts

Incorrect. Don’t worry, review the explanation and try again!

Explanation: Equity increases with a credit entry, representing more ownership or profit for the owners.

Correct! You’ve got it right. Keep up the good work!

15 / 15

15. Which type of account increases with a debit entry?

A. Liabilities

B. Equity

C. Assets

D. Revenue

Incorrect. Don’t worry, review the explanation and try again!

Explanation: Assets increase with a debit entry because they represent resources owned by the company.

Correct! You’ve got it right. Keep up the good work!

Your score is

The average score is 60%

LinkedIn Facebook VKontakte

0%

Restart quiz

Conclusion:

Debits and credits are the backbone of accounting. By taking this quiz, you’ll deepen your understanding of these fundamental concepts and improve your ability to record financial transactions accurately.

Whether you pass or need more practice, this quiz will set you on the path to accounting success.