Chapter 2: The Account

Question 1

What is the account

Answer 1

It is a formal record of transactions of an entity within a specific term

Question 2

What are the classifications of accounts and which two are known as the nominal accounts

Answer 2

Assets, expenses, liabilities, income and equity.

Income and expenses are also known as nominal accounts

Question 3

What is the format of an account (sections of a T-account)

Answer 3

-Name of account
-Account number
-Debit on the left side
-Credit on the right side
-Balance of account; which is also known as the difference between debit and credit
-Total of account

Question 4

The format of transactions or accounting process

Answer 4

(1)Transactions take place (2) are then recorded in journals (3) posted to the ledger and balance account

Question 5

When are general ledgers balanced?

(A) at the end of the day
(B) at the end of the week
(C) at the end of the month
(D) at the end of the year

Answer 5

(C) General ledgers are balanced at the end of each month

Question 6

What is the duality concept and what else is it known as

Answer 6

The duality concept applies the accounting equation which is equity = assets - liabilities or assets = equity + liabilities.

It is also known as the double entry, whereby transactions influence at least two accounts, one on the debit side and the other on the credit side.