Double-entry Bookkeeping
17 practice questions with explanations — 15 free to try
3 of these 17 questions are in the free 15-question taster · the full topic is part of Premium
PassNova has 17 AAT Level 2 Accounting practice questions on Double-entry Bookkeeping, each with a clear explanation. A 15-question taster is free with no sign-up; the full bank is part of PassNova Premium. Updated for 2026.
Double-entry Bookkeeping: example questions & answers
3 worked examples with answers and explanations below. Try 15 AAT Level 2 Accounting questions free in the browser; the full 17-question Double-entry Bookkeeping bank is part of PassNova Premium.
In double-entry bookkeeping, which statement correctly describes the rule for recording an increase in an asset?
- ADebit the asset account✓
- BCredit the asset account
- CDebit a liability account
- DCredit the capital account
Answer: Assets are increased by debit entries. The dual effect means every debit has a corresponding credit elsewhere in the ledger.
A business pays £500 by bank transfer to a supplier to settle an amount owed. What are the correct double entries?
- ADebit Purchases £500, Credit Bank £500
- BDebit Payables £500, Credit Bank £500✓
- CDebit Bank £500, Credit Payables £500
- DDebit Bank £500, Credit Purchases £500
Answer: Settling a payable reduces the liability (debit Payables) and reduces the asset cash (credit Bank). No expense is recorded because the purchase was already entered on credit.
Which of the following pairs represents the normal balances of expense and income accounts?
- AExpenses are credit balances; income accounts are debit balances
- BBoth expenses and income are debit balances
- CExpenses are debit balances; income accounts are credit balances✓
- DBoth expenses and income accounts normally carry credit balances in the ledger
Answer: Expense accounts normally carry debit balances and income (revenue) accounts normally carry credit balances. This follows the standard rules of double entry.