Chapter 7 Double enrty P2 Flashcards
1
Q
Why is balancing off ledger accounts so important?
A
Enables the business to know the balance on each account
2
Q
What type of ledger are the SLC and PLC?
A
Subsidiary
3
Q
What do the subsidiary ledgers contain?
A
a ledger account for each individual credit supplier
A ledger account for each individual credit customer
4
Q
Are the PLC and SLC part of the double entry system?
A
No
5
Q
What is the different between Capital income and Revenue income?
A
Capital income- long term assets
Revenue income- Short term income, interest
6
Q
What is the difference between Capital expenditure and Revenue expenditure?
A
Capital Expenditure- Assets used in the long term
Revenue Expenditure- Payements for day-day running costs and purchases
