Question

Search in Document Heading 2 Heading3 LO2. What is double-entry accounting? a) Draw a T-account and label the debit and credit side. b) Filin the expanded accounting equation with Debit (DR), Credit (CR), and Iacrease (Ine.) and Decrease (Dec.). Assets- Liabilities+ Equity Owner, Owner, WdraRevenuessens Assets Liabilities c) Fill in the normal balance of the account Normal Balance Debit Account type Asset Expenses Owner, Withdrawals Liabilities Revenues Owner, Capital d) Determining the balance in the following T-account Cash 25,000 1,000 2,000 3,000

Answer 1

Answer :-

( a ) :-

Meaning of Double Entry System :-

The twofold passage arrangement of bookkeeping or accounting implies that for each business exchange, sums must be recorded in at least two records. The twofold section framework additionally requires that for all exchanges, the sums entered as charges must be equivalent to the sums entered as credits.

Case of a Double Entry System :-

To represent twofold section, how about we accept that an organization obtains $10,000 from its bank. The organization's Cash account must be expanded by $10,000 and an obligation account must be expanded by $10,000. To expand an advantage, a charge section is required. To build an obligation, a credit passage is required. Consequently, the record Cash will be charged for $10,000 and the risk Loans Payable will be credited for $10,000.

Twofold Entry Keeps the Accounting Equation in Balance :-

Twofold passage likewise implies that the bookkeeping condition (resources = liabilities + proprietor's value) will dependably be in parity. In our precedent, the bookkeeping condition stayed in equalization in light of the fact that the two resources and liabilities were each expanded by $10,000 .

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