Exam (elaborations)
4; DOUBLE ENTRY BOOKKEEPING QUESTIONS AND ANSWERS FULLY SOLVED
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4; DOUBLE ENTRY BOOKKEEPING
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4; DOUBLE ENTRY BOOKKEEPINGWho is the inventor of double entry bookkeeping? - answerLuca Pacioli.
When was double entry bookkeeping invented? - answer15th century.
Describe the separate entity concept. - answerThe business is a separate entity to its
owner, meaning if an owner puts capital into the business the business "owes" that
amount to the owner.
Describe the dual effect / duality. - answerEvery transactions affects two accounts,
meaning that for every entry there must be an equal and opposite entry.
What is a debit entry? - answerAn entry into the accounting records that increases an
expense, an asset and drawings, or decreases a liability / income.
What is a credit entry? - answerAn entry into the accounting records that increase a
liability, income and capital, or decreases an asset / expense.
What is the double entry for an owner investing capital into their business? - answerDr
Cash
Cr Capital
What is the double entry for a cash purchase? - answerDr Expense
Cr Cash
What is the double entry for a credit purchase? - answerDr Expense
Cr Payables
What is the double entry for a cash sale? - answerDr Cash
Cr Sales
What is the double entry for a credit sale? - answerDr Receivables
Cr Sales
What is the double entry for settling a liability? - answerDr Payables
Cr Cash
What is the double entry for receipt of cash from a credit customer? - answerDr Cash
Cr Receivables
What is the double entry for topping up petty cash? - answerDr Petty Cash
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