Chapter 2 – the Recording Process

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Chapter 2 – The Recording Process Questions – 1-21, Pages 78-79 1. Describe the parts of a T account. T account consists of three parts: (1) a title, (2) a left or debit side, and (3) a right or credit side. Because the format of an account resembles the letter T, we refer to it as a T account. 2. “The terms debit and credit mean increase and decrease, respectively.” Do you agree? Explain. I do not agree. We use the terms debit and credit repeatedly in the recording. Debit simply means that the amount is entered on the left side of the account, while the word Credit means that the amount is entered on the right hand. Depending on the transaction, debit or credit will be increased or in some cases it will be decreased. We cannot…show more content…
5. State the rules of debit and credit as applied to (A) Asset accounts, (b) Liability accounts, and (c) The owner’s equity accounts (revenue, expenses, owner’s drawings, and owner’s capital) 6. What is the normal balance for each of the following accounts? (a) Accounts Receivable. (b) Cash. (c) Owner’s Drawings. (d) Accounts Payable. (e) Service Revenue. (f) Salaries and Wages Expense. (g) Owner’s Capital. 7.Indicate whether each of the following accounts is an asset, a liability, or an owner’s equity account and whether it has a normal debit or credit balance:(a)Accounts Receivable, (b) Accounts Payable, (c) Equipment, (d) Owner’s Drawings, (e) Supplies. 8. For the following transactions, indicate the account debited and the account credited. 9. Indicate whether the following accounts generally will have (a) Debit entries only,(b)Credit entries only, or (c)both debit and credit entries (1)Cash - Both debit and credit entries (2) Accounts Receivable both debit and credit entries (3)Owner’s Drawings. Debit entries only (4) Accounts Payable. Both debit and credit entries (5)Salaries and Wages Expense Debit entries only (6)Service Revenue Credit entries only 10. What are the basic steps in the recording process? The basic steps in the recording process are:- Step 1:- To analyze each transaction - In this step, business documents are examined to determine the effects of the transaction

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