Meaning of Double Entry - SS1 Accounting Past Questions and Answers - page 1
What is double-entry bookkeeping?
A method of recording financial transactions in one account
A method of recording financial transactions in two different accounts
A method of recording financial transactions in three different accounts
Which of the following represents a debit entry?
Money coming in
Money going out
Money owed
What is the purpose of double-entry bookkeeping?
To record transactions in a single account
To ensure the accounting records are balanced
To create a record of only debit entries
Which accounts are involved in a double entry for a purchase made on credit?
Only the inventory account
Only the accounts payable account
Both the inventory account and the accounts payable account
In double-entry bookkeeping, why are transactions recorded twice?
To make the accounting records more complicated
To identify errors in the accounting records
To make the accounting records longer
Simply state the difference between a debit and a credit in double-entry bookkeeping in one sentence.
Debits represent money going out, while credits represent money coming in.
Why is double-entry bookkeeping important for businesses?
Double-entry bookkeeping is important for businesses because it helps to ensure that the accounting records are accurate and that errors are identified and corrected. It also allows for better tracking of financial transactions and helps businesses make informed decisions based on their financial records.