Accounting chapter 2

Question 1

When asset is increasing?

Answer 1

its debit on left

Question 2

what is asset decreasing?

Answer 2

it credit on right

Question 3

ASSETS = LIABLITIY AND EQUITY

Owner equity = BOE( BEGGING OF OWNERS EQUITY) + net account (N1)

Income= revenue -expenses

Question 4

what are accounts in asset?
hint 6

Answer 4

accounts recevieable
notes recevible
supplies
furniture
cash
prepaid expenses ( Prepaid expenses
Items that are paid for in advance of receiving their benefits. These are assets.)

Question 5

what are the account in liabilities?
hint : 3

Answer 5

accounts payable
note payable
unearned revenue

Question 6

what are the accounts under equity?
hint 6

Answer 6

capital
withdrawal
rental revenue
services revenue
salaries expense
adverting expense

Question 7

what is ledger?

Answer 7

-a record containing all accounts used by a business
-may be computerized or maintained manually
each company has it own unique set of accounts

Question 8

what is T- account?

Answer 8

Represents account in the ledger .
used as learning tool.
difference btw the debit side and credit side is balance

Question 9

What is an double entry accounting?

Answer 9

-transactions are recorded using debits and credits
-every transaction affects TWO ACCOUNTS
-equal debit and credit will keep the accounting equation in balance and prevent errors.
debit=credit

Double-entry accounting
An accounting system where every transaction affects and is recorded in at least two accounts; the sum of the debits for all entries must equal the sum of the credits for all entries.

Question 10

what are normal balances?

Answer 10

an account’s normal balance is the debit or credit side where increases are recorded.

Question 11

WHAT IS ALCREW
and would owner’s withdrawal increase debit or decrease? then what happens to credit? why?

Answer 11

ASSETS, LIABLITIES, CAPTIAL, REVENUE, EQUITY,WITHDRAWL

Withdrawl increases debit while decreases credit because owner’s equity which is decreased for debit decreased even more with the withdrawal that affect credit since credit increased with owner’s equity but with loss in equity meaning credit decreases.

Question 12

what are charts of accounts?

Answer 12

-a list of all accounts used in the ledger by the company.
-unique for each company
-accounts are usually numbered
-

Question 13

what are the first 4 steps in accounting cycle ?

Answer 13

1. analyze the transaction based on source documents.
2. record journal entry
   3.post entry to ledger
3. prepare trial balance

Question 14

anayzling transactions and how? 3 steps

Answer 14

1. determine which accounts are being affected
2. determine if account balances are increasing or decreasing
3. apply rules of debit and credit

Question 15

what is general journal entry?
what is posting general entries?

Answer 15

Entries are originally recorded in the General Journal. This process is called journalize

general journal information is transferred to the general ledger .

accounts balance are updated

this process is called posting

Question 16

the six steps process for posting journal entries

Answer 16

1. identify account
2. enter date
3. enter journal page
4. post the amount
5. enter the account balance
   6.enter accounts number.