by Alf Crowder
Dive into the intricate world of accounting journal entries, where precision and accuracy are paramount. This quiz will challenge your understanding of the principles and practices that underpin the recording of financial transactions. Ready to prove your accounting prowess? Let’s get started!
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Accounting Journal Entry Quiz Questions Overview
1. What is the primary purpose of a journal entry in accounting?
To summarize financial statements
To record individual financial transactions
To prepare tax returns
To audit financial records
2. Which of the following accounts is typically debited when a company receives cash?
Cash
Accounts Receivable
Revenue
Accounts Payable
3. In a journal entry, what is the effect of a credit to an expense account?
Increases the expense
Decreases the expense
Increases the liability
Decreases the asset
4. Which of the following is an example of a contra account?
Accounts Receivable
Accumulated Depreciation
Revenue
Cash
5. What type of account is ‘Unearned Revenue’?
Asset
Liability
Equity
Expense
6. When a company pays off a loan, which accounts are affected?
Cash and Revenue
Cash and Accounts Payable
Cash and Loan Payable
Cash and Equity
7. What is the normal balance of an asset account?
Debit
Credit
Neutral
Variable
8. Which account is credited when a company provides services on account?
Cash
Accounts Receivable
Service Revenue
Unearned Revenue
9. What does a compound journal entry involve?
Only one debit and one credit
Multiple debits and/or credits
Only one account
No accounts
10. Which financial statement is directly affected by journal entries?
Balance Sheet
Income Statement
Cash Flow Statement
All of the above
11. What is the effect of a debit to a liability account?
Increases the liability
Decreases the liability
Increases the asset
Decreases the asset
12. Which of the following is recorded in the general journal?
Routine transactions
Adjusting entries
Closing entries
All of the above
13. What is the primary characteristic of a reversing journal entry?
It corrects errors in the original entry
It simplifies the recording of future transactions
It adjusts for accrued expenses
It is used only at year-end
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