Financial Accounting Quiz

Debits and Credits MCQ Quiz (True & False Questions with Answers)

29/05/2026 4 min read
Debits and Credits MCQ Quiz (True & False Questions with Answers)

📑 table of contents

  1. Debits and Credits Questions
  2. Debits and Credits MCQ Quiz online
  3. Debits and Credits (Answer & Explanations)

Debits and Credits Questions

Scroll down to see the correct answers with detailed explanations.

Test your accounting knowledge with this Debits and Credits True/False quiz designed for students and beginners.

  1. Debits and credits must always be equal in every journal entry.
  2. A debit entry increases an asset account.
  3. A credit entry increases an expense account.
  4. Liabilities are increased by a debit entry.
  5. Equity accounts are decreased by a credit entry.
  6. Revenues are recorded with a credit entry.
  7. Debits and credits apply only to cash transactions.
  8. A debit entry in a liability account will increase its balance.
  9. When recording depreciation, a debit is made to an expense account.
  10. A credit to the sales account decreases its balance.
  11. A debit entry in an asset account decreases its balance.
  12. Revenue accounts decrease with debit entries.
  13. The normal balance of an expense account is a credit.
  14. The normal balance of an asset account is a debit.
  15. Accrued liabilities are credited when recognized.
  16. The cash account is increased by crediting it.
  17. Owners’ equity decreases with a debit entry.
  18. Unearned revenue is recorded as a debit.
  19. A debit in the dividends account increases equity.
  20. Debits and credits must balance only at the end of the accounting period.

 

Debits and Credits MCQ Quiz online

Can you score 100% in Debits & Credits? Try this quiz 👇

 

Debits and Credits (True or False questions)

50 Questions in 30 minutes

Pass Score 70%

1 / 50

A debit entry increases an asset account.

2 / 50

Accrued expenses are debited when recognized.

3 / 50

A credit entry increases an expense account.

4 / 50

A debit entry in a liability account will increase its balance.

5 / 50

Wages payable is debited when the payment is made.

6 / 50

A credit entry in the capital account increases its balance.

7 / 50

Accumulated depreciation is recorded with a debit.

8 / 50

Accrued liabilities are credited when recognized.

9 / 50

The cash account is increased by crediting it.

10 / 50

A debit in the dividends account increases equity.

11 / 50

Prepaid insurance is increased by a debit entry.

12 / 50

Liabilities are increased by a debit entry.

13 / 50

A debit entry to the owner’s capital account decreases equity.

14 / 50

A debit to the supplies account indicates that supplies were purchased.

15 / 50

Prepaid expenses are recorded with a credit.

16 / 50

Credits decrease liability accounts.

17 / 50

A credit entry reduces the balance of an asset account.

18 / 50

Revenue accounts decrease with debit entries.

19 / 50

A credit to the sales account decreases its balance.

20 / 50

Debits and credits apply only to cash transactions.

21 / 50

Dividends paid to shareholders are credited to the cash account.

22 / 50

The purchase of supplies on account is recorded with a debit to the Supplies account.

23 / 50

Cost of goods sold is increased by a credit entry.

24 / 50

Debits and credits must balance only at the end of the accounting period.

25 / 50

The purchase of equipment on credit is recorded with a debit to the Equipment account and a credit to the Accounts Payable account.

26 / 50

Debits and credits must always be equal in every journal entry.

27 / 50

The normal balance of a dividends account is a debit.

28 / 50

Accounts payable increase with a debit entry.

29 / 50

Retained earnings increase with a debit entry.

30 / 50

A credit to a liability account will decrease its balance.

31 / 50

When recording depreciation, a debit is made to an expense account.

32 / 50

The normal balance for an accounts receivable account is a credit.

33 / 50

Sales returns are credited to decrease the revenue account.

34 / 50

Advertising expense is credited to increase its balance

35 / 50

A debit entry in a liability account increases its balance.

36 / 50

Sales discounts are debited when recorded.

37 / 50

A debit to cash indicates an outflow of cash.

38 / 50

A debit entry decreases the balance of a revenue account.

39 / 50

A debit entry in an asset account decreases its balance.

40 / 50

Rent expense is increased with a debit entry.

41 / 50

Unearned revenue is recorded as a debit.

42 / 50

Interest income is increased with a credit entry.

43 / 50

Revenues are recorded with a credit entry.

44 / 50

Owners' equity decreases with a debit entry.

45 / 50

The normal balance of an asset account is a debit.

46 / 50

A credit entry increases the balance of a revenue account.

47 / 50

The normal balance of an expense account is a credit.

48 / 50

Interest payable is debited when paid.

49 / 50

Unearned revenue decreases with a credit entry.

50 / 50

Equity accounts are decreased by a credit entry.

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Debits and Credits (Answer & Explanations)

  1. Debits and credits must always be equal in every journal entry.
    • Answer: True
    • Explanation: This is a fundamental principle of double-entry bookkeeping; every debit must have a corresponding credit.
  2. A debit entry increases an asset account.
    • Answer: True
    • Explanation: Debiting an asset account increases its balance, as assets are recorded on the debit side of the balance sheet.
  3. A credit entry increases an expense account.
    • Answer: False
    • Explanation: Expense accounts increase with a debit entry and decrease with a credit entry.
  4. Liabilities are increased by a debit entry.
    • Answer: False
    • Explanation: Liabilities increase with a credit entry and decrease with a debit entry.
  5. Equity accounts are decreased by a credit entry.
    • Answer: False
    • Explanation: Equity accounts increase with credits and decrease with debits.
  6. Revenues are recorded with a credit entry.
    • Answer: True
    • Explanation: Revenues increase the equity of a business and are recorded with credits.
  7. Debits and credits apply only to cash transactions.
    • Answer: False
    • Explanation: Debits and credits apply to all types of transactions, not just cash.
  8. A debit entry in a liability account will increase its balance.
    • Answer: False
    • Explanation: A debit entry decreases the balance of a liability account.
  9. When recording depreciation, a debit is made to an expense account.
    • Answer: True
    • Explanation: Depreciation is an expense, so it increases with a debit entry.
  10. A credit to the sales account decreases its balance.
    • Answer: False
    • Explanation: Sales increase with credits, so a credit increases the balance of the sales account.
  11. A debit entry in an asset account decreases its balance.
    • Answer: False
    • Explanation: A debit entry increases the balance of an asset account.
  12. Revenue accounts decrease with debit entries.
    • Answer: True
    • Explanation: Revenue accounts, part of equity, decrease with debit entries.
  13. The normal balance of an expense account is a credit.
    • Answer: False
    • Explanation: The normal balance of an expense account is a debit.
  14. The normal balance of an asset account is a debit.
    • Answer: True
    • Explanation: Asset accounts have a normal debit balance, meaning they increase with debits.
  15. Accrued liabilities are credited when recognized.
    • Answer: True
    • Explanation: Accrued liabilities represent obligations and are recorded with a credit.
  16. The cash account is increased by crediting it.
    • Answer: False
    • Explanation: Cash is an asset account, which increases with debits.
  17. Owners’ equity decreases with a debit entry.
    • Answer: True
    • Explanation: Owners’ equity accounts decrease with debits and increase with credits.
  18. Unearned revenue is recorded as a debit.
    • Answer: False
    • Explanation: Unearned revenue is a liability and is recorded with a credit.
  19. A debit in the dividends account increases equity.
    • Answer: False
    • Explanation: Dividends decrease equity, so a debit to the dividends account decreases equity.
  20. Debits and credits must balance only at the end of the accounting period.
    • Answer: False
    • Explanation: Debits and credits must balance for every single transaction.

 

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