Week 5 Trial Balance and Financial Statements

Question 1

What are the different steps of the accounting process?

Answer 1

1) record transactions (double entry)
2) transfaer the journal entries to the ledger accounts( t accounts)
3) balance of the ledger accounts
4) prepare the trial balance (debit and creddit balances extracted from the ledger must tally)

Question 2

What is a debtor

Answer 2

A customer who buys goods without paying for them straight away is known as a debotr and is an asset.

Question 3

what is a creditor?

Answer 3

A person to whoem a business owes money is a liability and a creditor.

Question 4

in a trial balnce does total debits have to equal toal credits?

Answer 4

if the balnces are then collected in a trial balance. If the double entry is correct total debits = total credits.

Question 5

if debts exceed credits what do you have?

Answer 5

Debits exceed credits = debit balance

Question 6

if credits exceed debits what do you have?

Answer 6

Credits exceed debits = credit balance