Ch 3 - Double Entry Bookkeeping

Question 1

Debits are on the…..

Answer 1

Left

Question 2

Credits are on the….

Answer 2

Right

Question 3

In terms of Dr/ Cr; Assets and Expense Accounts are

Answer 3

Debited to add to them and
Credited to subtract them.

A debit increases the account, a credit decreases it.

Question 4

In terms of Dr/ Cr; Liability, Revenue and Equity accounts are

Answer 4

Credited to add to them and
debited to subtract them.

A debit decreases the account, a credit increases the account.

Question 5

What does duality concept mean?

Answer 5

Each transaction has two effects; i.e it will affect at least two ledger accounts.

Question 6

Summary for recording transactions;

Answer 6

1. Which items (accounts) are affected?
2. Have they been increased or decreased?
3. Should relevant question be DR or CR?
4. Has an entry for DR and CR been made?