Chapter Five- Double Entry Bookkeeping (Part 2)

Question 1

Balance Carried Down

Answer 1

In the ledger account the term used to describe the balancing figure that makes the column with the smaller figure total the larger figure

Question 2

Balance Brought Down

Answer 2

Always the same figure as the balance carried down, but used on the opposite side of the account to balance the carried down; the balancing figure is described as the balance brought down

Question 3

Capital Expenditure

Answer 3

On assets used in the long term ie in more than one period (non-current assets)

Question 4

Capital Income

Answer 4

From sales of assets used in the long term

Question 5

Revenue Expenditure

Answer 5

Payments for day-to-day running costs and purchases, including wages and interest paid to the bank

Question 6

Revenue Income

Answer 6

Receipts from sales and other short-term income such as bank interest, rent and commission

Question 7

Subsidiary Ledgers

Answer 7

The sales ledger and purchase ledger, which are memorandum ledgers that are not part of the general ledger, contain a ledger account for each individual credit customer or credit supplier. Not part of the double entry system