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Bookkeeping Certification — Practice Exam

Debits, credits and accounts: practice questions

Our Bookkeeping bank has 12 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.

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Question 1

What type of account is 'Unearned revenue'?

  1. Revenue
  2. An expense
  3. A liability
  4. An asset
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C. A liability — The business owes goods or services to the customer.

Question 2

Which accounts normally have a debit balance?

  1. Liabilities and revenue
  2. Liabilities and equity
  3. Assets and expenses
  4. Equity and revenue
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C. Assets and expenses — Liabilities, equity and revenue normally have credit balances.

Question 3

Which account is a contra-asset account?

  1. Prepaid insurance paid in advance
  2. Retained earnings
  3. Accumulated depreciation
  4. Accounts payable
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C. Accumulated depreciation — Contra-assets have credit balances and reduce related assets.

Question 4

What type of account is 'Prepaid insurance'?

  1. An asset
  2. A liability
  3. An expense
  4. Equity
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A. An asset — It becomes an expense as the coverage is used.

Question 5

What happens to the accounting equation when a business buys supplies on credit?

  1. Liabilities decrease
  2. Assets increase and equity decreases
  3. Assets and liabilities both increase
  4. Nothing changes
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C. Assets and liabilities both increase — Supplies up, accounts payable up.

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