Today we will learn “25 short questions and answers-Double Entry System“. It will definitely help you do well in any form of competitive exams, such as school or college viva tests, career written exams or interviews, etc.
If you want to do well in accounting, practice these 25 short questions and their answers on a regular basis.
For theory please read this article Double Entry System of Accounting.
Short Questions and Answers- Double Entry System
Question-1: What is a double-entry system?
Answer: The system of recording two aspects of a transaction is known as a double-entry system.
Question-2: What are the benefits of the double-entry system?
Answer: The benefits of the double-entry system are as follows:
- Complete account
- Provide arithmetical accuracy
- Determine profit and loss
- Determine the financial position
- Helpful for future planning
- International recognition, etc.
Question-3: What are the demerits of the double-entry system?
Answer: The demerits of the double-entry system are as follows:
- The complexity of the accounting system,
- Need an experienced person,
- Increase the volume of work,
- Limited application, etc.
Question-4: What are the principles of the double-entry system?
Answer: The principles of double-entry system are as follows:
- Dual aspect
- Giver and receiver
- A scientific system of accounting
- Justify arithmetical accuracy, etc.
Question -5: What is “Debit”?
Answer: The left side of an account is called Debit.
Question-6: What is “Credit”?
Answer: The right side of an account is called Credit.
Question-7: What types of books are maintained under a double entry system?
Answer: The books are maintained under the double-entry system is as follows:
- Purchase book
- Sales book
- Purchase return book
- sales return book
- Note receivable book
- Note payable book
- General Journal
- Cash book
- Ledger, Etc.
Question-8: What is a complete and scientific method of accounting?
Answer: Double Entry System.
Question-9: Why is the double-entry system called the scientific method?
Answer: The double entry system is called the scientific method because it verifies the mathematical accuracy of the calculation.
Question-10: In a double-entry system, which book transactions are recorded first?
Answer: The Journal is the first book where transactions are recorded.
Question-11: What is the name of the account that benefits from the double-entry system?
Answer: The name of the account that benefits from the double-entry system are Debtor.
Question-12: In the double-entry system, what is the account that provides benefits?
Answer: The account that provides benefits is Creditor.
Question-13: What does “Debit” mean?
Answer: Debit means:
- Increases in assets, expenses and
- Decreases in liabilities, owners’ equity & income.
Question-14: What does “Credit” mean?
Answer: Credit means:
- Decreases in assets, expenses and
- Increases in liabilities, Owners equity & income.
Question-15: What is the final result of the double-entry system?
Answer: The double entry system’s final result is that total asset equal total liabilities.
Question-16: For each transaction, what does a double-entry accounting system produce?
Answer: a double-entry accounting system produces two retrograde outcomes of equal value.
Question-17: which is affected by each transaction in the double-entry accounting system?
Answer: Accounting Equation is affected by each transaction in the double-entry accounting system.
Question-18: What is the modern method used to determine the debit-credit of various accounts?
Answer: Accounting equation method.
Question-19: How is the dual aspect of the transaction analyzed?
Answer: One party will receive and the other party will provide.
Question-20: What is the expanded accounting equation?
Question-21: What is the meaning of A, L, C, R, E, and D in an expanded accounting equation?
Answer: the meaning of A, L, C, R, E, and D in the expanded accounting equation is as follows:
- E=Expenses and
- D= drawing.
Question-22: What is considered in the case of a double-entry accounting system?
Answer: Receiver’s account debit and provider’s account credit.
Question-23: What type of transaction affects the accounting equation?
Answer: Business transactions always affect the accounting equation.
Question-24: Which system does not follow any specific method of accounting?
Answer: Single entry accounting system does not follow any specific method of accounting.
Question-25: What is a Single Entry system?
Answer: Single entry system is a method of accounting in which only cash and personal accounts are recorded or stored.
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