module 2

18問 • 1年前

問題一覧

are the terminologies used to connote increase or decrease in assets, liabilities, capital, revenue and expenses. It is very important to know how it works and how it affects the individual accounts. Any wrong usage or application would result to a messy financial records, and would take a lot of time for the bookkeeper or accountant to put things in order. The following points should first be considered: Ability to identify whether an item is an asset, liability, capital, revenue or expenses. Understanding the business transaction and its effect for the above named items. Knowing by heart, the accounting equation.

debit and credit

increase in asset

debit

decrease in asset

credit

increase in liability

credit

decrease in liability

debit

increase in capital

credit

decrease in capital

debit

increase in revenue

credit

decrease in revenue

debit

increase in expenses cost

debit

decrease in expenses cost

credit

what are the Books of Accounts or the Accounting Records

general journal, general ledger, subsidiary ledger

this is the book of original entry. Transactions will first be recorded in the general journal wherein the principles of debit and credit will strictly be followed. Account titles shall be entered whether debit or credit. To identify the nature of transaction by the reader of the financial records, appropriate explanations shall be provided for each transaction following the debit and credit entries.

general journal

is the book of secondary entry. This is because, journal entries recorded in the general journal shall be posted with the general ledger according to its nature i.e., this is the process of classifying because each transaction with debit and credit entries shall be classified one by one in each ledger designed for each account title.

general ledger

are the records supporting the general ledger. The total amount of the general ledger was broken down into different subsidiary ledgers. The total of the individual subsidiary ledgers must tally with the total of the single general ledger.

subsidiary ledger

item Normal Balance

asset debit, liability credit, capital credit, revenue credit, expenses or cost debit

This is otherwise known as the “T” account The total debits and the total credits shall be derived. Whatever is the difference between the total debits and the total credits shall be the balance of the account.

short cut of general ledger

these are the balances that should normally appear in the ledgers:

normal balances