U3, AOS 1 - KK6 - Entries in the GL

Question 1

Type of Account: Asset
Increase =
Decrease =

Answer 1

Type of Account: Asset
Increase = DR
Decrease = CR

Question 2

Type of Account: Liability
Increase =
Decrease =

Answer 2

Type of Account: Liability
Increase = CR
Decrease = DR

Question 3

Type of Account: Owners Equity
Increase =
Decrease =

Answer 3

Type of Account: Owners Equity
Increase = CR
Decrease = DR

Question 4

Type of Account: Revenue
Increase =
Decrease =

Answer 4

Type of Account: Revenue
Increase = CR
Decrease = DR

Question 5

Type of Account: Expenses
Increase =
Decrease =

Answer 5

Type of Account: Expenses
Increase = DR
Decrease = CR

Question 6

What is the acronym that helps you to remember which side the ledger increases or decreases on?

Answer 6

DEALER

Increase on Debit:Dividends,Expenses,Assets
Increase on Credit:Liabilities,Equity,Revenue

Question 7

What is the general ledger?

Answer 7

General Ledger: the collective name for all Ledger accounts.
The purpose of a ledger account is to record all the transactions that affect a particular item.

Question 8

We complete the General Ledger instead of…

Answer 8

…instead of preparing a Balance Sheet after every transaction, transactions are entered into Ledger accounts in the General Ledger.

Question 9

What is double-entry Accounting?

Answer 9

Double entry accounting requires, at least, 2 entries to record each transaction such that debits must equal credits. This facilitates error trapping in that the system must always be in balance. It is tested by completing a Trial Balance at the end of each reporting period.

Ensures both/all aspects of each transaction are recorded so it provides a more complete picture of the business as it is based on the accounting equation A = L + OE

Double entry allows for the preparation of financial reports which can be used to make financial decisions.

Question 10

What are the column headings on each side of a ledger?

Answer 10

Date, Cross-Reference, Amount

Question 11

The two sections of a ledger are…

Answer 11

DR (Debits)
CR (Credits)

Question 12

T/f - If you record something in the DR side of a ledger, it must appear in the CR side of another ledger.

Answer 12

True - remember, what goes up must come down. Double entry recording means that our Accounting Equation will still balance and CR’s will equal DR’s.