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Questions and Answers
What does the debit aspect represent in a business transaction?
What is the primary evidence in support of a business transaction called?
What is the purpose of a source document or voucher?
What is the basis for entries in the books of accounts?
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Who prepares and countersigns the accounting vouchers?
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What are the documents like bills, cash memos, and receipts termed as in accounting?
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Which term is used for activities in cash terms in business transactions?
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What is the term used for the effect of business transactions on the accounting equation?
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What does the accounting process begin with?
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What is the term used for the basis on which accounting is done?
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What is the primary purpose of using vouchers in accounting?
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In accounting, what is the term used for activities that involve cash at the time of making transactions?
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What is the effect of business transactions on the accounting equation?
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What is the basis for entries in the books of accounts?
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What is the term used for the origin of business transactions in the accounting process?
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What does the debit aspect represent in a business transaction?
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What is the primary evidence in support of a business transaction called?
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What term is used for the written documents containing the analysis of business transactions for accounting and recording purposes?
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What is the basis for entries in the books of accounts?
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In a business transaction, what represents the Take aspect?
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Study Notes
Business Transactions and Accounting Basics
- The debit aspect in a business transaction represents the receiving side or the value added to an asset or expense account.
- The primary evidence supporting a business transaction is known as a source document.
- Source documents or vouchers serve to document the details of the transaction and provide proof and reference for accounting entries.
- Entries in the books of accounts are based on evidence from source documents like invoices, receipts, and contracts.
- Accounting vouchers are prepared by the accounting department and must be countersigned by authorized personnel to validate the transaction.
- Documents such as bills, cash memos, and receipts are collectively referred to as source documents in accounting.
Cash Transactions and Accounting Equation
- The term used for cash-related activities in business transactions is cash transactions.
- The impact of business transactions on the accounting equation is represented through changes in assets, liabilities, and equity, illustrating the relationship between them.
- The accounting process begins with identifying and recording transactions through source documents.
Accounting Principles and Vouchers
- The foundation upon which accounting is conducted is known as the accounting basis or accounting principles.
- The primary purpose of using vouchers in accounting is to ensure proper documentation, authorization, and tracking of financial transactions.
- Activities involving cash at the time of transactions are termed cash transactions, emphasizing the immediate financial impact.
Additional Notes
- The origin of business transactions in the accounting process is documented through source documents, critical for accurate record-keeping.
- The effect of business transactions on the accounting equation can be summarized as the changes in the financial position of a business, balancing the equation through debits and credits.
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Description
Test your knowledge on accounting for business transactions including selling goods, collecting payments, making payments, and other related activities. Understand how these transactions are recorded and classified in accounting.