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HomeAccountingExplanationBookoforiginalentriesGeneraljournal

Howtodebitandcredit

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Therearefivetypesofaccounts:Assets,Expenses/Loses,Liabilities,Incomes/GainsandCapital

FinancialAccounting
MultipleChoice
Questions#1
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WedebitanAccountwhenthereis:
1.IncreaseinAssetsforexampleincreasingindebtors,goods,notesreceivable,Building,machineryetc
2.IncreaseinExpensesforexampleincreaseinrent,salaries,depreciationexpensesetc
3.DecreaseinLiabilitiesforexampledecreaseinCreditor,billspayable,bankloan,bondspayableetc
4.DecreaseinIncomesforexampledecreaseinsales,commission,dividend,discountreceivedetc
5.DecreaseinCapitalforexampledecreaseinownerequity,sharecapitaletc

BankReconciliation
Statement
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WeCreditanAccountwhenthereis:
1.IncreaseinAssetsforexampleincreasingindebtors,goods,notesreceivable,Building,machineryetc
2.IncreaseinExpensesforexampleincreaseinrent,salaries,depreciationexpensesetc
3.DecreaseinLiabilitiesforexampledecreaseinCreditor,billspayable,bankloan,bondspayableetc
4.DecreaseinIncomesforexampledecreaseinsales,commission,dividend,discountreceivedetc
5.DecreaseinCapitalforexampledecreaseinownerequity,sharecapitaletc
Ifyouarestillwonderinghowtodebitandcredit,checkoutourtopicDebitandCredit

EXAMPLENo.1SimpleDoubleentries

December3.

Paidrentforfactorybuilding$50,0000

December5.

PaidcashtoMr.ZandCo.$200forgoodspurchasedoncredit

December7.

Paidcash$500fortelephonebills

December20.

Commission$1000receivedforsellinggoodsofGman

DATE

DESCRIPTION

Dec.3

DEBIT

CREDIT

Rentexpenses

Cash

$50,000

$50,000

Dec.5

Creditor(Mr.ZanCo.)

Cash

$200

$200

Dec.7

Telephoneexpenses

Cash

$500

$500

Dec.20

Cash

Commisssionincome

$1000

$1000

Explanation(ItisnotthepartofJournalordoubleentries)

FOLIO

RectificationofErrors
ErrorsnotaffectingTrial
Balanceagreement
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FinancialAccounting
MultipleChoice
Questions#24
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Bookoforiginalentries
CashBookQuestions
andAnswers
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Paidrentforfactorybuilding$50,0000
SinceBusinesshasincurredRentexpenseorwecansaythatthereisanincreaseinexpensesandforthatbusinessisnowpayingcash
orthereisadecreaseinbusiness'scashandthereforewedebitedrentexpenseandcreditedcash
PaidcashtoMr.ZandCo.$200forgoodspurchasedoncredit
Firmhadpurchasedgoodsoncreditorincreaseditsliabilitiesandit'sbusinessresponsibilitytorepaythecreditorwhichthefirmdidon
the5thDecember.Asaresultthereisadecreaseincash(Asset)anddecreaseincreditor(liability).Therefore,creditorisdebitedand
cashiscredited.
Paidcash$500fortelephonebills
Becausethefirmispayingitstelephonebillsandasweknowtelephonebillsisaexpense.Therefore,thereisanincreaseinexpenses
andadecreaseincashasaresultbillsexpensesaredebitedandcashiscredited.
Commission$1000receivedforsellinggoodsofGman
Thefirmisgettingorrecognizingcommission(Income)orthereisanincreaseinincomewhichisalwayscreditedandfirmisgetting
commissionintheformcash.So,thereisanincreaseincashwhichisdebited

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