Below are the questions and answers to my recent 'Basic Bookkeeping Questions & Answers - Exam Prep #1' video. The questions are available in text and video formats, the answers are available in text at the bottom of this page.
Basic Bookkeeping Questions
Question 1 - What is a balance sheet?
Question 2 - An asset is...?
Question 3 - A liability is...?
Question 4 - If an asset account is debited, is it increased or decreased?
Question 5 - If an expense account is debited, is it increased or decreased?
Question 6 - Debits and credits should always balance in a general journal entry. True or false?
Question 7 - What is the debit and credit for a £50.00 stationery purchase from the business current account?
Question 8 - What is the debit and credit for a £500.00 credit sale?
Answers are below...
Basic Bookkeeping Answers
1. The balance sheet is a list of the entities assets and liabilities. The balance sheet provides a financial snapshot of the entity. It provides readers with an idea of what the business owes and owns.
2. An asset is an item owned.
3. A liability is something owed.
4. Debiting the asset account will increase the amount in the asset account.
5. Debiting the expense account will increase the amount in the asset account.
6. True. All postings should have corresponding credits and debits, the amounts on either side should always balance.
7. Debit stationery expense £50.00 and credit business current account £50.00.
8. Debit sales ledger control account £500.00 and credit sales £500.00.