Fundamentals of Financial Accounting Chapter 4

<p>Identify economic transaction/source documents (D)</p> Signup and view all the answers

<p>Zero balance (B)</p> Signup and view all the answers

<p>To classify accounts for journal entries (B)</p> Signup and view all the answers

<p>Transferring to ledger account (B)</p> Signup and view all the answers

<p>At least two accounts must be involved (D)</p> Signup and view all the answers

<p>Identify the transaction from source documents (A)</p> Signup and view all the answers

<p>Determining the transaction amount (C)</p> Signup and view all the answers

<p>Account number (B)</p> Signup and view all the answers

<p>The balance of the account (D)</p> Signup and view all the answers

<p>It contains all asset, liability, and owner's equity accounts (C)</p> Signup and view all the answers

<p>Journal page number (C)</p> Signup and view all the answers

<p>To provide a complete view of all accounts (A)</p> Signup and view all the answers

<p>Entering the accounts debited/credited and their amounts (A)</p> Signup and view all the answers

<p>Dr.Fixtures RM2,000, Cr.Other Payable – Eco Sdn Bhd RM2,000 (A)</p> Signup and view all the answers

<p>Compound entry (A)</p> Signup and view all the answers

<p>Other Payable – Eco Sdn Bhd (B)</p> Signup and view all the answers

<p>After the purchase of fixtures (C)</p> Signup and view all the answers

<p>Cash (B)</p> Signup and view all the answers

<p>Assets increase, and liabilities increase (B)</p> Signup and view all the answers

<p>To record financial transactions in chronological order (B)</p> Signup and view all the answers

<p>Payment of salaries and purchase of supplies on credit (C)</p> Signup and view all the answers

<p>Cash increases by RM55,000 (B)</p> Signup and view all the answers

<p>Dr. Motor Van RM30,000; Cr. Cash RM30,000 (C)</p> Signup and view all the answers

<p>Equity (B)</p> Signup and view all the answers

<p>Fixtures (C)</p> Signup and view all the answers

<p>Total assets increase (A)</p> Signup and view all the answers

<p>Dr. Fixtures RM2,000; Cr. Accounts Payable RM2,000 (B)</p> Signup and view all the answers

<p>Capital (D)</p> Signup and view all the answers

<p>Debit (B)</p> Signup and view all the answers

<p>To summarize increases and decreases of specific items (A)</p> Signup and view all the answers

<p>On the right (credit) side (D)</p> Signup and view all the answers

<p>Paying for office supplies (B)</p> Signup and view all the answers

<p>To hold individual accounts for tracking transactions (D)</p> Signup and view all the answers

<p>To ensure debits equal credits (B)</p> Signup and view all the answers

<p>It does not reveal all types of errors (B)</p> Signup and view all the answers

<p>A horizontal line separating debits and credits (A)</p> Signup and view all the answers

<p>Increases in capital are credited (D)</p> Signup and view all the answers

<p>To verify that total debits equal total credits (C)</p> Signup and view all the answers

<p>Calculate the total revenue and expenses (C)</p> Signup and view all the answers

<p>It is listed with a zero in the normal balance column (B), It is omitted entirely (C)</p> Signup and view all the answers

<p>Verifying that total debits and credits match (A)</p> Signup and view all the answers

<p>All accounts and their balances, whether zero or not (B)</p> Signup and view all the answers

<p>At the end of the accounting period (B)</p> Signup and view all the answers

<p>Listed as debits and credits from the general ledger (A)</p> Signup and view all the answers

<p>Further analysis is needed to identify errors (A)</p> Signup and view all the answers

A basic accounting tool that summarizes increases and decreases in a specific asset, liability or owner's equity item.

This accounting system records every transaction with two entries: one debit and one credit, ensuring the accounting equation remains balanced.

Used to represent an account. It has a left (debit) side and a right (credit) side, reflecting increases and decreases.

Increases in assets, expenses, and drawings are recorded on the left side, while decreases are recorded on the right side.

Increases in liabilities, capital, and revenues are recorded on the right side, while decreases are recorded on the left side.

A collection of accounts organized in a systematic way. Accounts are grouped into specific categories like assets, liabilities, owner's equity, revenues, and expenses.

The process of transferring information from the journal to the ledger, assigning each transaction to its respective account.

A list of all accounts with their corresponding debit and credit balances. It verifies that the total debits equal the total credits.

The book of original entry where each financial transaction is recorded for the first time.

The process of transferring information from the journal to the individual accounts in the ledger.

It records all assets, liabilities, and owner's equity accounts.

The process of identifying the transaction from source documents, specifying the affected account, determining the increase/decrease, and entering the transaction into the journal.

These are documents like invoices, receipts, or bank statements that provide evidence of a transaction.

It ensures that the total debits and credits recorded in a journal entry are equal.

The procedure to determine the balance of an account through T-accounts.

In double-entry bookkeeping, every transaction affects two or more accounts to satisfy the fundamental accounting equation (Assets = Liabilities + Owner's Equity).

The total amount debited in a transaction must always equal the total amount credited.

A record of financial transactions categorized by account type. Examples include assets, liabilities, equity, revenue, and expenses.

A summary report listing all the accounts and their balances. It's a crucial step in the accounting cycle.

This occurs in a ledger account when the total debit side exceeds the total credit side.

This occurs in a ledger account when the total credit side exceeds the total debit side.

This occurs in a ledger account when the total debit side is equal to the total credit side.

Steps to ensure the correct recording of transactions and financial statements.

Represents the increase in the worth of a business, usually from an owner's investment.

A record of a financial transaction, showing the debit and credit accounts involved.

When you pay for something with cash, it's a cash transaction.

A business asset like a vehicle or equipment.

When you purchase something without paying immediately (e.g., with an invoice), it's a credit transaction.

Items used in a business that are not categorized as cash or motor vehicles.

1. List all accounts and their balances from the ledger. 2. Calculate the total Debits and Credits. 3. Ensure that the Debits total equals the Credits total.

The process of recording a transaction in the journal for the first time.

The process of verifying that the total debits equal the total credits. This helps uncover potential errors.

An increase in the amount owed to Eco Sdn. Bhd. for the purchase of fixtures on credit. This creates a liability for the company, since they owe money to a supplier.

Decreases the liability owed to Eco Sdn. Bhd. and decreases the balance of Cash. This reflects the payment of the amount owed to Eco Sdn. Bhd.

A journal entry that involves more than two accounts, such as the purchase of fixtures on account because it affects more than one account (Fixtures, Other Payable and Cash).

A basic accounting tool that summarizes increases and decreases in a specific asset, liability, owner's equity, revenue, or expense item.

A collection of accounts organized in a systematic way, grouped into categories such as assets, liabilities, owner's equity, revenues, and expenses.