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Week2WortherleyOAESCorrections

Week2WortherleyOAESCorrections - 1 2 3 4 Question Q1...

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1 . Question: Q1: Describe double-entry accounting and how it affects transaction analysis. Your Answer: For every asset in a business, there is a claim to that asset. It could be from the owner of the business or a stakeholder in the business. Double entry accounting is where you track no only where your money comes from, but where it goes. Additionally, it can go to more than one account, so it could also be called multiple entry accounting. Two entries are made for each account. One is a credit entry, the other is a debit entry. The two entries keep the accounting equation balanced. Assets = Liability + Owner’s Equity 2 . Question: Q2: Review pages 28 30 in Collier's Accounting for Managers text and explain one business event by showing its double-entry transaction, summarized ledger, and how that event affected the financial statements of the company. Your Answer: The pay weekly wages is an event that was an expense to the organization by 3,000. Additionally it was an asset to the bank account of 3,000 which received the money to pay the employees. By looking at the financial
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