Ledgers

Question 1

Explain the term Double entry

Answer 1

is a system where it ensures the integrity of the financial values recorded in the accounting system.

Question 2

How can a transaction be recorded ?

Answer 2

A transaction can be recorded if there is evidance of the transaction taking place and it must be able to me measure in the form of money

Question 3

What effect do transactions have on businesses ?

Answer 3

It has a direction affect on the finanical statements of the business

Question 4

What must happen in order to follow the double entry bookkeeping rules ?

Answer 4

We must account for every transaction made in the financial statement.we must take into consideration the effects which are equal and oppsite.These are debit and credit sides etc.

Question 5

What is the accounting equation ?

Answer 5

The Accounting equation is when Assets + Liabilitts + Capital

Question 6

What does Double Entry ensure ?

Answer 6

Double Entry ensures,when transation on the financial statement are record on a two nominal ledger of the finanical statement.This ensures there is redundancy for errors and mistakes to be recitified

Question 7

Where should transactions be kept ?

Answer 7

Transaction should be kept in the general ledger.All ledgers are kept in the nominal which is the overall ledger of accounts.

Question 8

Name some types of ledgers

Answer 8

Expenses
Liabilities
Capitial
assets

Question 9

Expalin the term personal ledger

Answer 9

A personal ledge accounts for suppliers and credit customers.This explain why it is reference as owed to by them and recogniseable by management.

Question 10

Explain the steps involved in recording a transaction

Answer 10

When recording an transaction,we must find two items which will be directing efforted by the transaction such as the bank and house.

We must identify on whether they wilkl either decrease or increase

We must identify on whether they will goon the credit or debit side of the ledger/ financial statement.

We must look at both sides and ensure the amount is the same at all times.

Question 11

Explain the term credit sales

Answer 11

Credit sales is where the sale has cuased the goods to leave the business.The business owes the supper,they are referred to as reciebel until the money is paid back.They are typically found in the current assets of the financial statement of the company

Question 12

Explain the term creit purchases

Answer 12

The term credit purchases referes to an organisation buying goods and services on creit and paying suppiers back later.They owe the suppliers they money,until they pay the suppiers bacl thye are refered to as trade payables.Credit purchases are often found in the liabilites section of the financial statement