Week 4 Ledger Account and Trial Balance

Question 1

What is the dual effect?

Answer 1

The principles of double entry work on the basis that for each debit entry there must be a credit entry. This is also known as the dual effect.

Question 2

What does DEAD CLIC STAND FOR AND MEAN?

Answer 2

D.debit entry increases:
A.ssets
E.xpenses
D.rawings

C.redit Entry increases
L.iabilities
I.ncome
C.apital

Question 3

What will a credit entry do according to dead clic?

Answer 3

A credit entry will:
Decrease an asset
Increase a liability
Increase income

Question 4

What will a debit entry do according to dead clic?

Answer 4

A debit entry will:
Increase an expense
Increase an asset
Decrease a liability

Question 5

in the cash book what does a credit entry mean?

Answer 5

A credit entry indicates a payment made by the business; the matching debit entry is then made in an account denoting an expense paid, an asset purchased or a liability settled.

Question 6

in the cash book what does a debit entry mean?

Answer 6

A debit entry in the cash book indicates cash received by the business; the matching credit entry is then made in an account denoting revenue received, a liability created or an asset realised.

Question 7

what does a t account look like?

Answer 7

A T account looks like the letter T hence the name.

Question 8

Where is credit and debit on a T account?

Answer 8

Debit is on the left

credit is on the right for a T account

Question 9

are ledger and t accounts teh same thing?

Answer 9

ledger is another name for t account.

Question 10

do debits have to to equal credits?

Answer 10

DEBITS must equal CREDITS…

Question 11

how does balancing off t accounts work?

Answer 11

balancing off t accounts is when you:

Add up both sides to see which is the largest
Copy the largest total in to the other side
Identify the balancing figure that would make both columns be the same total
then you carry that forward
Balances carried forward on the Cr of the T account appear on the Dr side of the Trial Balance and vice versa

Question 12

What is the trial balance?

Answer 12

The trial balance accumulates the total debit balances and total credit balances from each ledger account (t account) to ensure that the total debits equal the total credits, following the double-entry bookkeeping principle.