Trial Accounts

Question 1

What is a Ledger?

Answer 1

A group of accounts

Question 2

What is an Account?

Answer 2

A format used to record changes caused by transactions

Question 3

What is debit?

Answer 3

Left side, has the beginning balance of assets

Question 4

What is credit?

Answer 4

Right side, has the beginning balance of liabilities and OE

Question 5

What is double entry accounting?

Answer 5

Requires that equal debit and credit amounts be recorded on each transactions

Question 6

What is an exceptional balance?

Answer 6

If a person pays over the amount owned or owe to someone or if a person withdraws more than what’s available

Question 7

Name three scenarios of exceptional balance

Answer 7

1. Cash
   A business overdraws the amount in their cash
2. A/R
   Customer overpays us, now we owe them. We don’t return money but they get a service worth the amount they overpay
3. A/P
   We overpay a creditor and they owe us money. They won’t use a money usually but we get a service from them that is valued at the same amount we overpaid.