Chapter 3-4

Question 1

examples of business transactions

Answer 1

cash transactions, credit transactions, asset transactions, stock transactions, and accrual transactions.

Question 2

examples of source documents

Answer 2

invoices, receipts, deposit slips, checks, travel documents, timecards, orders, credit memos

Question 3

what are source documents

Answer 3

anything that documents a transaction. proof of transaction

Question 4

how does the objectivity principle tie in with source documents?

Answer 4

objectivity principle relates as The objectivity principle emphasises that financial statements should be objective, i.e., the accounting information should be unbiased. source documents help give proof so its not wrong

Question 5

what happenes to source documents after accounting enteries have been completetd

Answer 5

the source documents are filed for future reference

Question 6

what is an equation analysis sheet

Answer 6

tool of displaying individual transactions

Question 7

steps to analyzing a transaction

Answer 7

1. identify all assets and liabilites that must be changed and make changes
2. see if the owners equity has changed
3. make certain that at least two of the individual items have changed
4. make sure that the equation is still in balance

Question 8

what is transferred from the balance sheet to the equation analysis sheet

Answer 8

Assets, liabilities, and capital, totals of each account

Question 9

what is a good clue to whether capital has increased or decreased?

Answer 9

if assets decrease and liabilites also decrease corresponding then capital is unchanged. if assets decrease and liabilites unchnaged, captial should be affected

Question 10

Does a transaction always change both sides of the accounting equation.

Answer 10

Yes, because both sides have to be balanced.

Question 11

what are ledger accounts

Answer 11

A General Ledger is a group or file of accounts.Each Account has a page(s) in the ledger. Transactions that affect the account are recorded on each account’s page

Question 12

what are t-accounts

Answer 12

The T-accounts (or Ledger pages) are kept in the order in which the items are found on the balance sheet

Question 13

which side is debit and credit

Answer 13

dr = left, cr = right

Question 14

whcih side is assetes and liabilites

Answer 14

left = assets, right = liabilites

Question 15

how to start a t account

Answer 15

Record name at top of account. Record Beginning balances on correct side.

Question 16

what is the rule of debit and credit

Answer 16

Increases are shown on the samesideas the normal beginning balance of the account. Decreases are shown on the opposite side of the normal beginning balance of the account.

Question 17

assets increase with a —- and decrease with a ——

Answer 17

debit, credit

Question 18

liabilites —- with a debit, —— with a credit

Answer 18

decrease, increase

Question 19

equity decrease with —– and increase with —

Answer 19

debit, credit

Question 20

calculation account balance

Answer 20

• add up two sides total
• subrat smaller total from the larger
• cricle final number

Question 21

expenitioal balance

Answer 21

An exceptional balance happens when an account shows the opposite balance. For example:

A credit balance in an asset account might mean that a customer overpaid, or you returned more goods than what was initially sold.
A debit balance in a liability account could indicate that you overpaid a supplier.

Question 22

purchase on account

Answer 22

item purhcased on credit, not paid for at time of purchase

Question 23

sale on account

Answer 23

item sold on credit, cash not receiived at the time it is solf

Question 24

payement on account

Answer 24

money opaid out to a creditor to decrease the amount owed

Question 25

recepit on account

Answer 25

money received from debtor to reduced the amount owed

Question 26

trial balace defentiontion

Answer 26

a statement of all debits and credits in a double-entry account book, with any disagreement indicating an error.

Question 27

how trial balance formated