Module 7

Question 1

The concept of the equation must always be equal. The left side must be equal to the right side of the equation.

Answer 1

Duality Concept

Question 2

Assets =

Answer 2

Liabilities + Equity

Question 3

The basic summary device of accounting is WHAT.

Answer 3

The Account

Question 4

A detailed record of the increases, decrease and balance of each element that appears in an entity’s financial statements.

Answer 4

Account

Question 5

The simplest form of the account is known as

Answer 5

T” account because of its similarity to the letter T.

Question 6

As income increases, equity WHAT

Answer 6

increases

Question 7

As expense increases, equity WHAT

Answer 7

decrease

Question 8

The basic tool of accounting

Answer 8

the accounting equation.

Question 9

The left side of the equation shows WHAT

Answer 9

how much the business owns,

Question 10

the right side of the equation shows WHAT

Answer 10

how much resources do the outside creditor and owner supplied to the business

Question 11

Accounting is based on WHAT system which means that the dual effects of business are recorded.

Answer 11

a double-entry system

Question 12

[DEBIT OR CREDIT] [+ OR -]

ASSETS

Answer 12

+DEBIT, -CREDIT

Question 13

[DEBIT OR CREDIT] [+ OR -]

EXPENSE

Answer 13

+DEBIT, -CREDIT

Question 14

[DEBIT OR CREDIT] [+ OR -]

DRAWING

Answer 14

+DEBIT, -CREDIT

Question 15

[DEBIT OR CREDIT] [+ OR -]

LIABILITIES

Answer 15

-DEBIT, +CREDIT

Question 16

[DEBIT OR CREDIT] [+ OR -]

CAPITAL

Answer 16

-DEBIT, +CREDIT

Question 17

[DEBIT OR CREDIT] [+ OR -]

REVENUE

Answer 17

-DEBIT, +CREDIT

Question 18

An economic occurrence that causes changes in an enterprise’s assets, liabilities, and/or equity.

Answer 18

accounting event

Question 19

A particular kind of event that involves the transfer of something of value between two entities.

Answer 19

transaction

Question 20

When a transaction causes assets, expenses, or drawing to increase.

Answer 20

To debit the assets, expenses, or drawing account.

Question 21

When transaction causes assets, expenses, or drawing to decrease.

Answer 21

We have to credit such assets, expenses, or drawing account.

Question 22

[WHAT MODEL?]

Increase in asset, increase in capital investment

Answer 22

MODEL NO. 1

Question 23

[WHAT MODEL?]

Increase in asset, increase in capital (revenue)

Answer 23

MODEL NO. 2

Question 24

[WHAT MODEL?]

Increase in asset, increase in liabilities

Answer 24

MODEL NO. 3

Question 25

[WHAT MODEL?]

Decrease in asset, decrease in capital

Answer 25

MODEL NO. 4

Question 26

[WHAT MODEL?]

Decrease in assets, decrease in liabilities

Answer 26

MODEL NO. 5

Question 27

[WHAT MODEL?]

Increase in one asset account and decrease in another asset account, or increase in one liability account and decrease in another liability account, or increase in one capital account and decrease in another capital account, or increase in capital and decrease in liability, or decrease in capital and increase in liability.

Answer 27

MODEL NO. 6