Prework Double Entry Flashcards

1
Q

When considering what type of account the transaction will impact what are the 6 types of account that need to be considered?

A
  1. expenses
  2. assets
  3. drawings
  4. laibilies
  5. income
  6. capital
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2
Q

what does it mean when we debit the account?

A

increasing expenses, assets and drawings

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3
Q

what does it mean when we credit the account?

A
  • increase liabilities, income and capital
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4
Q

What is an acronym to remember this?

A

DEAD CLIC
D= debit
E= expense
A= assets
D= drawings
C= credit
L= liabilities
I= income
C= capital

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5
Q

what is a decrease in liabilities, income and capital known as?

A

known as a debit

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6
Q

What is a decrease in expenditure, assets, drawings known as?

A

known as a credit

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7
Q

what are the 4 steps to recording a transaction?

A
  1. identify the two accounts that are affected
  2. are they being increased or decreased?
  3. should the account be debited or credited
  4. check that a debit entry and a credit entry for equal amounts have been made
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8
Q

what are the rules for debit and credit?

A

you must always have an equal and opposite debit and credit

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9
Q

what would be the debit and credit for:
Sold vegetables for £2,500

A

Dr Cash £2,500
Cr Sales £2,500

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10
Q

what would be the debit and credit for:
Brought 6,000 worth of fruit from wholesalers on credit?

A

Dr purchases 6,000
Cr payables 6,000

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11
Q

what would be the debit and credit for:
brought 3000 for cash

A

Dr purchases 3000
Cr Cash 3000

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12
Q

what would be the debit and credit for:
sold all the fruit bought in (2) above for 7,5000 on credit to Rory Glossop

A

Dr receivables 7,500
Cr sales 7,500

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13
Q

what would be the debit and credit for:
Paid Wholesalers 3500

A

Dr payables 3500
Cr Cash 3500

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14
Q

what would be the debit and credit for:
Rory Glossop paid for his fruit in full

A

Dr Cash 7500
Cr Receivable 7500

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15
Q

what would be the debit and credit for:
paid a 200 telephone bill

A

Dr phone bill 200
Cr cash 200

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16
Q

what would be the debit and credit for:
draw 400 cash out of the business

A

Dr drawings 400
Cr Cash 400

17
Q

what would be the debit and credit for:
bought a van for 300 on cash

A

Dr Van 300
Cr Cash 300

18
Q
A