Question

Purchased office supplies on account. assets increase; liabilities increase assets decrease; liabilities decrease assets increase; owner's equity increase assets increase; owner's equity decrease

Answer 1

1. Purchase office supplies on account (credit basis )

• Then assets increase ; liability increase.

Because as per accounting equation

ASSETS = LIABILITY + SHARE HOLDER'S EQUITY.

Here, purchase on credit basis ,

Then company has increased its assets by purchasing new one

Similarly

It purchased on credit basis , then company has liability to pay money in future.

So ,

• A​​​​​​SSETS = LIABILITY + SHARE HOLDER EQUITY ,
• so , When assets increase ; then liability also increases.

2. PAID CREDITORS ON ACCOUNT,

Assets decrease; liability decrease.

Because as per accounting equation

ASSETS= LIABILITY+SHARE HOLDERS EQUITIES

Here, cash paid to creditors

The company decrease assets by paying cash i.e cash is asset and it reduces liability by paying cash to creditors.

So,

• ASSET = LIABILITY+ SHARE HOLDER'S EQUITY.

so , when assets decrease then liability is also decrease.

Question-9

3) List of the account entire group of accounts maintained by business:

ANSWER: T- ACCOUNT

Because

General Journals

the general journal refers to a book of original entries, in which accountants and bookkeepers record business transactions, in order to the date events happens.

CHART OF ACCOUNTS

A chart of accounts is a list of the categories used by an organization to classifybthe financial assets, liabilities, and transactions.

ACCOUNTING CYCLE

The accounting cycle is a collective process of identifying, analyzing, and recording the accounting events of company.

It is 8 step process

T- ACCOUNT

T-account is used to help understand individual ledger accounts and the effects of each transaction. Including debit and credit transaction.T ACCOUNT IS ALSO CALLED LEDGER .

SO , IT IS A LIST OF ENTIRE GROUP ACCOUNT OF A BUSINESS...

Thank you.

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