Exam Accounting - University of Cebu

UNIVERSITY OF CEBU

College Of Commerce and Accountancy

Accounting 1 (BSA)

Quiz-Rules of Debit and Credit

Name:______________________________________ Class Sched:_____________ Score:__________

I. MULTIPLE CHOICE

1. The accounting equation

a. is used to determine the amount of liabilities owed.

b. is used to determine the amount of income earned during the period.

c. shows the claims on the entity's assets by both the creditors and owner.

d. shows the claims on the owner's equity by the creditors.

2. In the accounting equation, an increase in asset can be associated with

a. An increase in a liability c. a decrease in liability

b. A decrease in owner's equity d. an increase in another asset.

3. An investment by the owner in a business increases

a. assets and owner's equity c. liabilities and owner's equiyt

b. assets and liabilities d. assets only

4. The acquisition of an asset for cash

a. increases assets and owner's equity c, decreases assets and increases liabilities

b. increases in assets and liabilities d. leaves total assets unchanged

5. The acquisition of an asset on credit

a. increases assets and owner's equity c, decreases assets and increases liabilities

b. increases in assets and liabilities d. leaves total assets unchanged

6. The payment of liability

a. decreases assets and owner's equity c. decreases assets and increases liabilities

b. increases assets and decreases liabilities d. decreases assets and liabilities

7. The sale of an asset on credit

a. increases assets and liabilities c. leaves total assets unchanged.

b. decreases assets and liabilities d. decreases assets and increases liabilities

8. A revenue

a. increases assets and liabilities c. increases assets and decreases owner's equity

b. increases assets and owner's equity d. leaves total assets unchanged.

9. An owner's withdrawal

a. increases assets and owner's equity c. increases assets and decreases owner's equity

b. decreases assets and owner's equity d. decreases assets and increases owner's equity

10. An expense

a. decreases assets and liabilities c. leaves owner's equity unchanged.

b. decreases owner's equity d. is basically the same as liability

II. IDENTIFICATION

_________ 1. Account titles fro expenses that are paid in advance but are not yet incurred or have not yet expired.

_________ 2. Refers to the amount due and payable by the enterprise to the Bureau of Internal Revenue for the tax withheld from the employees.

_________ 3. Includes tables and chairs, counters, display cases and the like.

_________ 4. An account title for a financial obligation of an enterprise that constitutes an oral or verbal promise to pay.

_________ 5. This is the promissory note received by the business from the customer arising from rendering of services, sale of merchandise, etc.

_________ 6. Expenses that are already incurred but not yet paid.

_________ 7. Same as accounts payable in nature but only the obligation is evidenced by a promissory note.

_________ 8. Includes calculators, typewriters, adding machines, computers and the like.

_________ 9. A financial obligation of the enterprise which requires a fixed or tangible property to be pledged as collateral to ensure payment.

_________ 10. This is an account title for an income collected or received in advance but is not yet considered as "earned'.

III. TRUE OR FALSE. Write True if the statement is correct and False if not.

_________ 1. For every transaction, there is at least one account affected.

_________ 2. Accounts that appear on the left side of the equation normally have credit balances.

_________ 3. A debit entry always increases the balance of an account.

_________ 4. Expenses decreases owner's equity and are recorded by debits.

_________ 5. Debit means to increase and credit means to decrease.

_________ 6. Assets, expenses and capital are debited for increases.

_________ 7. The normal balance of any account appears on the side for recording increases.

_________ 8. Value received by the business is recorded on the debit side.

_________ 9. All transactions, to be recorded in the books of ccounts, should be analyzed from the viewpoint of the owner.

_________ 10. Account titles are the identifications or brief descriptions of items that falls to the same kind, class or nature

IV. RULES OF DEBIT OR CREDIT. The account type determines how increases or decreases in it are recorded. Determine whether the word debit or credit is appropriate for each statement. Write your answer on the blank.