MUHASEBE I

Assets = Liabilities + Owner’s Equity

Unearned revenue is a liability account.

Prepaid expenses are asset accounts.

• Accounts Payable. The Accounts Payable account is the opposite of Accounts Receivable. A or The company promises to pay a debt in the future. Arises from a credit purchase.

Owner,Capital. Owner’s Capital account represents the net contribution of the owner in the business.

A chart of accounts is a listing of the accounts and the account numbers which identify their location in the ledger. The numbering system usually starts with the balance sheet accounts and follows with the income statement accounts.

The Ledger is a record of all the accounts that the company uses the changes in those accounts, and their balances.

The basic form of account generally is called as T-account, because the shape of the account resembles the letter T.T-accounts have a title and include two sides: Debit (left) and credit (right). Debit represents the left side of an account. Credit represents the right side of an account. Each account has a space for recording increases in the amount of the item.

Debiting refers to the act of making an entry on the left side of an account

Dr./Cr. Rules for Contributions (Owner’s capital): Contributions increase on right side by crediting while decrease on left side by debiting and normally show credit balance.

The correct answer is C. An account is an individual accounting tool that shows the increases and decreases in a specific asset, liability, or owner’s equity item during a specified period. Account receivables, account payables and net income are accounts.

Ledger is a record of all the accounts that the company uses the changes in those accounts, and their balances. A ledger is often defined as a book of accounts.

The left-hand side is called as debit side, and the righthand side is called as credit side. Having debits on the left and credits on the right is an accounting custom, or rule. This rule applies to all accounts.

Assets are economic resources that provide a future benefit for a business –something the business owns. Companies might sell their goods and services on account and receives a promise for future collection of cash. The Accounts Receivable account holds a customer’s promise to pay in the future for services or goods sold on account. It arises from a credit sale. The company collects cash from the customer sometime after the sale.

According to Dr./Cr. Rules for Expenses, expenses increase on left side by debiting while decrease on right side by crediting and normally show debit balance.

Journal entries include debit and credit effects of each transaction. In a journal entry, debits are ALWAYS entered first, and credits are INDENTED and listed second

The journalizing and posting process has five steps:
Step 1: Identify the accounts and the account types (asset, liability, or equity).
Step 2: Decide whether each account increases or decreases and then apply the rules of debits and credits.
Step 3: Record the transaction in the journal.
Step 4: Post the journal entry to the ledger.
Step 5: Determine whether the accounting equation is in balance.

A trial balance is an internal document used only by company insiders. Outsiders see only the company’s financial statements, not the trial balance.

Posting is the procedure of transferring journal entries to the ledger accounts.

Analyzing includes identification of economic events to understand how it affects accounting equation and which accounts should be used in recording.