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Journal Entries: Debits and Credits quiz #2

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  • Which type of account is increased with a credit?
    Liabilities, equity, and revenue accounts are increased with a credit.
  • Does common stock have a normal debit balance?
    No, common stock does not have a normal debit balance; it has a normal credit balance.
  • What does a credit entry represent in accounting?
    A credit entry represents an increase in liabilities, equity, or revenue, or a decrease in assets or expenses.
  • What are the four parts of a journal entry?
    The four parts are: date, accounts affected, amounts debited and credited, and a description of the transaction.
  • Which accounts have a normal credit balance?
    Liabilities, equity, and revenue accounts have a normal credit balance.
  • Which accounts normally have a debit balance?
    Assets and expense accounts normally have a debit balance.
  • Is common stock a debit or credit account?
    Common stock is a credit account.
  • Increases are entered on the credit side of which types of accounts?
    Increases are entered on the credit side of liabilities, equity, and revenue accounts.
  • What is the best interpretation of the word 'credit' in accounting?
    In accounting, 'credit' refers to an entry that increases liabilities, equity, or revenue accounts, or decreases assets or expenses.
  • Is common stock a credit account?
    Yes, common stock is a credit account.
  • What is the journal entry for the purchase of an asset on credit?
    Debit the asset account and credit the liability account (such as accounts payable).
  • What does the journal entry to purchase equipment on account include?
    It includes a debit to the equipment account and a credit to accounts payable.
  • Are decreases to liability accounts recorded on the credit side?
    No, decreases to liability accounts are recorded on the debit side.
  • Which accounts have a normal credit balance?
    Liabilities, equity, and revenue accounts have a normal credit balance.
  • What does a credit entry do in accounting?
    A credit entry increases liabilities, equity, or revenue accounts, or decreases assets or expenses.
  • Does a credit to the cash account increase the account?
    No, a credit to the cash account decreases the cash balance.
  • Which accounts have a normal debit balance?
    Assets and expense accounts have a normal debit balance.
  • Which accounts increase with a credit?
    Liabilities, equity, and revenue accounts increase with a credit.
  • A credit is not the normal balance for which type of account?
    A credit is not the normal balance for asset and expense accounts.
  • Which type of account is increased with a debit?
    Assets and expense accounts are increased with a debit.
  • Which account has a normal credit balance?
    Liabilities, equity, and revenue accounts have a normal credit balance.
  • Which accounts are increased with a debit?
    Assets and expense accounts are increased with a debit.
  • Which accounts increase with a debit?
    Assets and expense accounts increase with a debit.
  • Which account has a normal debit balance?
    Assets and expense accounts have a normal debit balance.
  • Which accounts have a normal debit balance?
    Assets and expense accounts have a normal debit balance.
  • What does a debit record in accounting?
    A debit is used to record increases in assets and expenses, and decreases in liabilities, equity, and revenue.
  • What accounts have normal credit balances?
    Liabilities, equity, and revenue accounts have normal credit balances.
  • What are the four parts of a journal entry?
    The four parts are: date, accounts affected, amounts debited and credited, and a description of the transaction.
  • What happens when you credit a liability account?
    Crediting a liability account increases the liability.
  • What is the normal balance of accounts payable?
    Accounts payable has a normal credit balance.
  • Which accounts have a normal debit balance?
    Assets and expense accounts have a normal debit balance.
  • What is the normal balance of accounts payable?
    The normal balance of accounts payable is a credit balance.
  • What does a debit represent in accounting?
    A debit represents an increase in assets or expenses, or a decrease in liabilities, equity, or revenue.
  • Which account has a normal debit balance?
    Assets and expense accounts have a normal debit balance.
  • Why set up a recurring journal entry in accounting?
    Recurring journal entries are set up to automate the recording of regular, repeated transactions, ensuring consistency and saving time.