The Evolution of the Double-Entry Bookkeeping System

1. Who is credited with formalizing double-entry bookkeeping?

A) Luca Pacioli
B) John Locke
C) Adam Smith
D) Karl Marx

2. In which year was Luca Pacioli's treatise on double-entry bookkeeping published?

A) 1494
B) 1500
C) 1512
D) 1485

3. What is the fundamental principle of double-entry bookkeeping?

A) Only one account is affected per transaction
B) Only cash transactions are recorded
C) Transactions are recorded in a single entry
D) Every transaction affects at least two accounts

4. What is the purpose of a trial balance?

A) To ensure debits equal credits
B) To assess profit and loss
C) To pay taxes
D) To create financial statements

5. What are 'journals' in the context of double-entry bookkeeping?

A) Equity reports
B) Invoices and receipts
C) Records of financial transactions
D) Summary of bank statements

6. Which of the following is a primary benefit of double-entry bookkeeping?

A) Decreases understanding of finances
B) Reduces errors in financial reporting
C) Increases paperwork
D) Eliminates the need for accountants

7. The balance sheet is based on which accounting principle?

A) The accounting equation
B) Revenue recognition
C) Matching principle
D) Historical cost

8. In what country did double-entry bookkeeping first gain prominence?

A) Italy
B) France
C) Germany
D) England

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