Lecture 3 - The Principles of Double Entry Bookkeeping

Question 1

What is bookkeeping

Answer 1

Where accounts are recorded by hand by keeping and managing them in a systematic way

Question 2

What is an account

Answer 2

a record of a transaction relating to a particular item

Question 3

What is another name for an account

Answer 3

journal entry

Question 4

What is recorded on the debit side of an account

Answer 4

an asset or expense account is increased with debit, debit is received

Question 5

What is recorded on the credit side of an account

Answer 5

liabilities, sales revenue and equity are increased with credit, credit is spent

Question 6

What is a T Account

Answer 6

it helps people to understand how the money moves in and out of an account

Question 7

What are the three steps t o completing the entry in a T Account

Answer 7

1. learn which account to debit and credit
2. learn were to enter the value of each transaction
3. other items to be included are
   > date
   > the name of the other account where the transaction is being entered

Question 8

What are the four steps in balancing up a T Account

Answer 8

1. add up column with larger amount
2. put this total on both sides of the account
3. record on the other side the figure that would make both sides add up (difference)
4. ‘carry down’ figure

Question 9

What is the general ledger

Answer 9

a book that records all the company’s financial activity, a list of financial transactions in specific order