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Test your bookkeeping knowledge!

What is the normal balance for a cash account?

Debit Credit

What is the normal balance for an income or sales account?

Debit Credit

What is the difference between the accrual basis of accounting and the cash basis of accounting?

Which report would be most helpful in determining if your general ledger is out-of-balance?

Define retained earnings

What does the term "Payroll tax liability" mean? Give three examples

What do the terms "LIFO" and "FIFO" stand for? When would you want to use one versus the other?

On June 1st, you sold a truck load of peaches for $2,000. You expect to be paid in 30 days. Give the journal entries that would record both the sale and the payment. Assume that this company uses the accrual basis of accounting

What does an aged accounts receivable report tell someone?

Your company has received 200 peach trees to add to your inventory. Fifteen days later, you receive the invoice for $500 for the trees. Illustrate this transaction with a journal entry again assuming the accrual basis.

10.

What does the term "2/10 Net 30" mean?

11.

How do you increase the dollar amount in a liability account?

Debit Credit

12.

What is the accounting equation?

13.

Which of the following is most important to the daily operations of a business?

14.

When people speak about the "bottom line," they are referring to:

15.

In column 1, indicate whether the following accounts are balance sheet (BS) or income statement (IS) accounts - check one.
In column 2, indicate whether the account normally has a debit (DR) balance or a credit (CR) balance - check one.
In column 3, indicate whether a debit entry (DR) or a credit entry (CR) would increase the balance in the account - check one.

	Column 1	Column 2	Column 3
Interest expense	BS IS	DR CR	DR CR
Cash in bank	BS IS	DR CR	DR CR
Cost of goods sold	BS IS	DR CR	DR CR
Repairs and maintenance	BS IS	DR CR	DR CR
Payroll taxes payable	BS IS	DR CR	DR CR
Sales	BS IS	DR CR	DR CR
Common stock	BS IS	DR CR	DR CR
Inventory	BS IS	DR CR	DR CR
Prepaid expense	BS IS	DR CR	DR CR
Accum. Depreciation	BS IS	DR CR	DR CR
Accounts receivable	BS IS	DR CR	DR CR
Accounts payable	BS IS	DR CR	DR CR