Chapter 4: Completing Accounting System

Question 1

Temporary Accounts

Answer 1

R-E-D
- need to be closed at the end of the year
-> Revenue, expenses, dividends

Question 2

Permanent Accounts

Answer 2

• can stay open
  -> All assets account, all liabilities account, equity

Question 3

Contra Accounts

Answer 3

T-A-D-A-A
- It always behave in the opposite way than the companion account (eg. Accumulated Depreciation (contra) & PPE (companion)
-> Treasury Shares, Acc. Dep, Dividends, Acc. Amorti., Allowance for doubtful Acc. Receivables

Question 4

Treasury Shares

Answer 4

Treasury Share Dr. & Share Capital Cr. (E+)

Question 5

Accumulated Depreciation

Answer 5

PPE Dr (A+) & Accumulated Depreciation Cr (A+)

Question 6

Accumulated Amortization

Answer 6

Intangible Assets Dr (A+) & Acc. Amortization Cr

Question 7

Dividends

Answer 7

Dividends Dr (E+) & Retained Earnings Cr (+)