Debits and credits
You record transactions in journal entries: assets and expenses increase with debits, liabilities, equity, and revenue increase with credits. Questions give a transaction and ask for the correct entry.
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Accounting Exam Study Guide
Bookkeeping, governmental accounting concepts, and quantitative reasoning for fiscal titles.
45 track practice questions in the bank · Free 25-question practice test included below.
Take Free Practice Test →Overview
Fiscal titles in city government keep the money straight: recording transactions, paying vendors, tracking budgets, reconciling accounts, and preparing reports that auditors and managers can rely on. The work is detail-driven, and a small error in a journal entry or a budget figure can ripple through the whole set of books.
The exam tests bookkeeping fundamentals — debits and credits, the accounting equation, journals and ledgers — plus governmental accounting concepts such as funds and encumbrances, and the quantitative reasoning needed for budgets and percentages. DCAS multiple-choice exams generally use a 70% pass mark.
Use this guide to learn the debit-and-credit rules until they are automatic, study the governmental concepts that make city accounting different from business accounting, and drill the arithmetic until it is fast and error-free.
What the exam typically tests
The accounting equation
You use Assets = Liabilities + Equity to find a missing figure or to check that a set of books is in balance. If the two sides do not match, an error exists.
Journals, ledgers, and trial balances
You follow a transaction from journal to ledger to trial balance, and you spot the error when debits and credits do not agree. Questions reward careful reading of which account is debited and which is credited.
Governmental fund accounting
You identify the fund used for a purpose — the General Fund for day-to-day operations, Capital Projects for building, Debt Service for repaying debt, and Special Revenue for restricted purposes.
Encumbrances and budgets
You work with budget figures and encumbrances — funds reserved for a planned purchase — and you calculate variances between budgeted and actual amounts.
Quantitative reasoning
You calculate percentages, totals, depreciation, and unit costs. The arithmetic is straightforward; the trap is using the wrong base figure, such as forgetting to subtract salvage value before depreciating.
Topic checklist
Work through this list honestly — drill the items you cannot do yet.
- ☐ Record a transaction as a correct journal entry with the right debit and credit
- ☐ Use the accounting equation to find assets, liabilities, or equity
- ☐ Tell accounts receivable apart from accounts payable
- ☐ Explain what a trial balance shows and what it means when it does not balance
- ☐ Identify the correct governmental fund for a given purpose
- ☐ Explain what an encumbrance is and why it matters
- ☐ Calculate a budget variance and say whether spending is over or under budget
- ☐ Calculate straight-line depreciation, remembering to subtract salvage value
- ☐ Calculate percentages, unit costs, and totals accurately
- ☐ Spot the account that is wrong in a journal entry
How to prepare
1Journal-entry drill
Daily, write journal entries for 10 everyday transactions — paying rent, buying supplies on credit, receiving cash for services. Say each entry out loud: what increases, and is it a debit or a credit? Good looks like all 10 correct without checking notes.
2Accounting-equation drill
Three times a week, solve 10 equation problems where one of assets, liabilities, or equity is missing. Good looks like all 10 correct in under five minutes.
3Fund flashcard routine
Daily, drill 10 flashcards on governmental funds and terms — General Fund, Capital Projects, Debt Service, Special Revenue, encumbrance — with a definition and an example on the back. Retire a card only after three correct recalls in a row.
4Budget-math drill
Three times a week, do 10 problems mixing percentages, variances, unit costs, and depreciation. Write out every step so a careless slip is easy to find. Good looks like all 10 correct with the work shown.
5Timed mixed set
Twice a week, do a 20-question timed mixed set from this track. Review every miss the same day and re-drill the concept it came from.
Common mistakes to avoid
- ✕ Reversing debits and credits: remember that assets and expenses increase with debits, while liabilities, equity, and revenue increase with credits.
- ✕ Forgetting salvage value in depreciation: subtract it from the cost before dividing by the useful life.
- ✕ Confusing receivable with payable: receivable is money owed TO the agency, payable is money the agency owes.
- ✕ Treating an encumbrance as money already spent: it is a reservation of funds, not a payment.
- ✕ Using the wrong base for a percentage: 12% of $250,000 is $30,000, not 10% of it.
- ✕ Assuming a balanced trial balance means the books are error-free: it only proves debits equal credits, not that every entry is correct.
Exam day strategy
- ✓ Write the accounting equation on scratch paper before you start: Assets = Liabilities + Equity.
- ✓ For journal entries, say what increases first, then decide debit or credit — never guess from the wording alone.
- ✓ On percentage and depreciation items, write out each step so a slip is easy to catch.
- ✓ Eliminate the answers that reverse the debit and credit before choosing between the close ones.
- ✓ Mark hard questions, move on, and return to them at the end.
- ✓ Save a few minutes to check that every question has an answer.
Sample questions
Try these 3 sample questions from the practice bank. The correct answer is marked — read the explanation even when you get one right.
Sample 1 · Accounting
A city office pays $500 in rent in cash. Which journal entry is correct?
- A.Debit Cash $500; credit Rent Expense $500
- B.Debit Rent Expense $500; credit Cash $500 ✓ Correct answer
- C.Debit Rent Expense $500; credit Accounts Payable $500
- D.Debit Cash $500; credit Rent Revenue $500
Paying rent is an expense, so Rent Expense is debited, and cash leaves the office, so Cash is credited. The tempting first option reverses the entry — it would record receiving cash instead of paying it.
Sample 2 · Mathematics
An agency has total assets of $120,000 and total liabilities of $45,000. Using the accounting equation Assets = Liabilities + Equity, what is total equity?
- A.$165,000
- B.$75,000 ✓ Correct answer
- C.$45,000
- D.$120,000
Equity = Assets - Liabilities = $120,000 - $45,000 = $75,000. The tempting $165,000 comes from adding liabilities to assets instead of subtracting them.
Sample 3 · Accounting
In governmental accounting, which fund is used for a city's day-to-day general operations, such as salaries and office supplies?
- A.Capital Projects Fund
- B.Debt Service Fund
- C.General Fund ✓ Correct answer
- D.Special Revenue Fund
The General Fund is the main operating fund for day-to-day government activities. The Capital Projects Fund is for building things, the Debt Service Fund is for repaying debt, and a Special Revenue Fund is restricted to a specific purpose.
Official sources
The exam announcement (Notice of Examination) is the final authority for the exam you are taking; check it for the exam number, eligibility, subjects tested, and instructions. DCAS multiple-choice exams generally use a 70% pass mark.
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All questions on NYCExamPrep.com are original practice questions written for study purposes. They are not official DCAS questions, and this site is not affiliated with the NYC Department of Citywide Administrative Services (DCAS) or the City of New York.