Lesson 1, Chapter 5

Question 2

Which side of the accounts to make (double) entries?

Answer 2

DEBIT SIDE: money in to the bank account is entered on the left-hand side

CREDIT SIDE: money going out is entered on the right-hand side

Question 3

TECHNIQUES—DEAD CLIC MNEMONIC

Answer 3

• Expense (debit column): increase an expense we need to post a debit entry

• Income (credit column): to increase income we need to post a credit entry

Question 4

What is the general ledger?

Answer 4

• The general ledger is where all the double entries are recorded. It contains separate general ledger accounts for the assets, liabilities, capital, expenses and income of a business
• The balances in the general ledger accounts are used to prepare the Statement of Financial Position & the Statement of Profit or Loss

Question 5

What are Ledger Accounts?

Answer 5

• Within the general ledger there are general ledger accounts for each type of income, expense, asset, liability or capital of a business