Week 3 Double Entry Bookkeeping

Question 1

What is the dual effect?

Answer 1

Dual effect: Every transaction that a business makes has two effects

e.g purchase a motor vehicle for cash

+ motor vehicle - cash

Question 2

what is the seperate entity concept?

Answer 2

the owner and business as seperate entities

Question 3

What are current assets?

Answer 3

Current assets- Assets that are currently cash or will soon be converted into cash in the trading activities of the business.

Question 4

what are non current assets?

Answer 4

Non-current assets-Assets used in the business to generate future economic benefits and used in the business for long term use (more than one year).

Question 5

What are drawings?

Answer 5

Money or goods taken out of the business by the owners for their personal use.