Double Entry

Question 1

What is an asset?

Answer 1

Anything owned by a business

Question 2

What is a liability

Answer 2

Anything owed by a business

Question 3

Give 4 examples of running costs.

Answer 3

Purchases, carriage, rent, wages, light, gas, telephone and any other expenses

Question 4

Give 2 examples of income

Answer 4

Sales revenue, capital, rent received, discount received, and any other sources of income.

Question 5

What are the two effects every transaction has?

Answer 5

Debit and credit

Question 6

What is the acronym for debits and credits

Answer 6

RAIL

Question 7

RAIL

Answer 7

Running costs and Assets are debits (unless decreased).

Income and liabilities are credits (unless decreased).

Question 8

Which side are debits recorded on?

Answer 8

The left side

Question 9

Which side are credits recorded on?

Answer 9

The right side

Question 10

What is personal savings recorded as?

Answer 10

Capital

Question 11

Is capital debited or credited?

Answer 11

Credited

Question 12

Are Sales returns debited or credited?

Answer 12

Debited

Question 13

Are purchase returns debited or credited?

Answer 13

Credited

Question 14

What are purchases of non-current assets called?

Answer 14

Vehicles or equipment

Question 15

Are vehicles debited or credited

Answer 15

Debited

Question 16

Are drawings debited or credited?

Answer 16

Debited

Question 17

Is the receivables ledger usually credit or debit account?

Answer 17

Debit account usually

Question 18

Is the payables ledger usually a credit or debit account

Answer 18

Credit account usually.