Ch 2 Eye Openers (23rd) - CHAPTER 2 ANALYZING TRANSACTIONS...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 2 ANALYZING TRANSACTIONS EYE OPENERS 1. An account is a form designed to record changes in a particular asset, liability, own- er’s equity, revenue, or expense. A ledger is a group of related accounts. 2. The terms debit and credit may signify either an increase or decrease, depending upon the nature of the account. For example, deb- its signify an increase in asset and expense accounts but a decrease in liability, owner’s capital, and revenue accounts. 3. Liabilities and owner’s equity both have rights or claims to assets as indicated by the accounting equation, Assets = Liabilities + Owner’s Equity. Therefore, the same rules of debit and credit apply to both liabilities and owner’s equity. 4. a. Decrease in owner’s equity b. Increase in expense 5. a. Increase in owner’s equity b. Increase in revenue 6. a. Assuming no errors have occurred, the credit balance in the cash account resul- ted from drawing checks for $1,250 in excess of the amount of cash on depos- it. b.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/22/2010 for the course BUSINESS BAIU09 taught by Professor Mr.ken during the Spring '10 term at American InterContinental University Dunwoody.

Page1 / 2

Ch 2 Eye Openers (23rd) - CHAPTER 2 ANALYZING TRANSACTIONS...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online