Unit 3 Recording business transactions (part 1)

Question 1

Double entry accounting?

Answer 1

Each transaction affects two or more accounts, one on the debit side and the other on the credit side

Question 2

Debit - Credit convention

Answer 2

Increases in Assets to be Debits

Decreases in Assets therefore must be credits

Question 3

What is a transaction?

Answer 3

Events altering financial position of a business and requiring the entering of information in accounting records

Question 4

Some activities recorded as a transaction?

Answer 4

Buying
Selling
Exchanging of goods and services for cash or on credit

Question 5

What is affected by a transaction?

Answer 5

Accounts (Basic recording units)

Question 6

How to start analyzing transactions?

Answer 6

Summarizing each transaction from the perspective of the entity

Question 7

An impact is a must on?

Answer 7

The accounting equation

Question 8

What does a transaction analysis include?

Answer 8

An examination of each business transaction with the aim of understanding its effect on the accounting equation

Question 9

Journal entries?

Answer 9

A summary of transaction analysis (shortened version) including application of double entry accounting