Chapter Two- Double Entry Bookkeeping (Part 1)

Question 1

Credit

Answer 1

The credit side of a ledger account is the right-hand side

Question 2

Debit

Answer 2

The debit side of a ledger account is the left-hand side

Question 3

Double-Entry Bookkeeping

Answer 3

A system of accounting where the two effects of each transaction are recorded

Question 4

Drawings

Answer 4

The money or goods that the owner takes out of the business

Question 5

Dual Effect

Answer 5

Every transaction a business undertakes has two effects on the business

Question 6

General Ledger

Answer 6

A collection of ledger accounts, where the double entry takes place for all the transactions of the business1

Question 7

Ledger Account (T-Accounts)

Answer 7

The accounts in which each transaction is recorded- there will be a ledger account for each type of transaction such as sales and purchases and for every type of asset and liability

Question 8

Purchase Ledger Control Account

Answer 8

A general ledger account for credit suppliers, representing the total of all the accounts in the purchase ledger. Part of the double entry system

Question 9

Sales Ledger Control Account

Answer 9

A general ledger account for credit customers, representing the total of all the accounts in the sales ledger. Part of the double entry system