Introductory Bookkeeping Concepts

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NOTE: Simply place your mouse cursor over True or False. There is no need to click the answer.
 1. Assets are property or economic resources that are expected to provide a future benefit to a business. True False
 2. Assets include accounts payable and notes payable. True False
 3. Assets are equal to liabilities plus owner's equity. True False
 4. If assets equal 100,000 and liabilities equal 25,000, then owner's equity is 125,000. True False
 5. Credits increase asset and expense accounts. True False
 6. Not all businesses use the same chart of accounts. True False
 7. Payments made for an owner's personal expenses are charged to owner's draws. True False
 8. If liabilities equal 75,000 and owner's equity equals 25,000, then assets are 50,000. True False
 9. An investment by the owner to his/her business will decrease owner's capital. True False
 10. The normal balance for the owner's drawing account is a credit balance. True False
 11. Supplies On Hand would be classified as an expense. True False
 12. Fees earned are classified as an asset account. True False
 13. The cash account is increased with a credit. True False
 14. A credit to Accounts Payable increases the accounts balance. True False
 15. A credit to fees earned will increase the balance of the fees earned account. True False
 16. Whether a debit or credit increases or decreases an account's balance depends on the type of account. True False
 17. The profit or loss for a period is reported using a balance sheet. True False
 18. The financial position of a business as of a specific date is reported using a balance sheet. True False
 19. Accounts payable, notes payable, taxes payable, and accounts receivable are all types of liability accounts. True False
 20. The amount calculated by subtracting total liabilities from total assets is called owner's equity or net assets. True False

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