Module 2 Recording financial information

Question 1

What is the accounting equation?

Answer 1

Capital = Assets - liability

capital = capital introduced + (income - expenses) - drawings

CI + (I-E) - D = A - L

Question 2

What is DEAL and CLIP

Answer 2

DEAL = DEBITS, CLIP = CREDITS

Drawings
Expenses
Assets
Losses

Capital
Liability
Income
Profit

Question 3

Manual journal entries are required for period end adjustments, what are these?

Answer 3

Depreciation charges on PPE
Cost of sales and inventories
Bad debt write offs and allowances for doubtful debts
Accrued and prepaid expenses
Accrued and deferred income