By Wallace W. Kravitz
This up-to-date variation offers a simplified, step by step method of bookkeeping ideas for rookies. The publication additionally concentrates on teaching proprietors of small companies who preserve their very own files. Chapters show use of economic statements, the ledger, the two-column basic magazine, and diverse different journals. guideline comprises true-to-life bookkeeping issues of solutions.
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Additional resources for Bookkeeping the Easy Way
Double-entry bookkeeping Ledger Rules of debits and credits T-account Questions 1. Which of the following statements is true? a) For every transaction, the account(s) debited equal the account(s) credited. b) For every transaction, the account(s) increased equal the account(s) decreased. 2. Explain why the incorrect statement in Question 1 is not true. 3. What would be the normal balance of any asset account? 4. On which sidedebit or creditdo accounts decrease? < previous page page_26 next page > < previous page page_27 next page > Page 27 Problems 4-1 Emilee Suzanne listed the following account balances: Cash $1,245 Equipment Supplies 3,670 430 Accounts Payable: L.
For every transaction, at least one account will be debited and one will be credited. Even though each transaction changes two or more account balances, the fundamental bookkeeping/accounting equation will always be in balance: A = L + OE. This is the explanation of the theory of DOUBLE-ENTRY BOOKKEEPING: for every transaction debits always equal credits. < previous page page_25 next page > < previous page page_26 next page > Page 26 Reexamine in T-accounts the transactions first explained on pages 10 and 11: (1) Morales borrowed $2,500 cash from the Island National Bank.
Witten Truck 150 225 85 5,750 Supplies 395 Accounts Payable: City Trust Company H. & H. Manufacturing Co. 1,250 800 (1) Open a ledger of T-accounts for each account, including Jacobs's owner's equity. (2) Prove that Assets = Liabilities + Owner's Equity. < previous page page_27 next page > < previous page page_28 next page > Page 28 4-3 Kimberley Travis completed the following transactions last week: Example: Paid Regal Bank, $150. (1) Bought $75 worth of supplies for cash. (2) Borrowed $1,000 from Regal Bank.