CHAPTER 2 w
THE RECORDING PROCESS
w w
SUMMARYwOFwQUESTIONSwBYwSTUDYwOBJECTIVESwANDwBLOOM’SwTAXONOMY
Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT
True-FalsewStatements
sg
1. 1 Kw 9. 2 Kw 17. 3 K 25. 5 Kw 33. 4 K
w sg
2. 1 Kw 10. 2 Kw 18. 3 26. 5 Cw 34. 5 K
w
Kw sg w
3. 1 Kw 11. 2 Kw 19. 4 27. 5 Kw 35. 6
Kw sg C
4. 1 Kw 12. 2 Kw 20. 4 28. 6 Kw 36. 7
Kw sg K
w
5. 2 Kw 13. 2 Kw 21. 4 29. 6 Kw 37. 7
Kw K
w
6. 2 Kw 14. 2 Kw 22. 4 30. 7 Kw
Kw sg
7. 2 K 15. 3 K 23. 4 31. 2 K
K sg
8. 2 K 16. 3 K 24. 5 32. 2 K
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MultiplewChoicewQuestions
38. 1 Kw 61. 2 Kw 84. 3 Cw 107. 4 Kw 130. 6 K
39. 1 Kw 62. 2 Kw 85. 3 Kw 108. 4 Kw 131. 6 K
w
40. 1 Kw 63. 2 Cw 86. 3 Cw 109. 4 Cw 132. 7 K
w
w
41. 1 Cw 64. 2 Cw 87. 3 Kw 110. 4 ANw 133. 7
C
42. 1 Kw 65. 2 Kw 88. 3 Kw 111. 5 Kw 134. 7
K
w
43. 1 Kw 66. 2 Kw 89. 3 Kw 112. 5 Kw 135. 7 w
44. 1 Kw 67. 2 Kw 90. 3 Kw 113. 5 Kw 136. 7 C
45. 2 Kw 68. 2 Kw 91. 3 Kw 114. 5 Kw 137. 7 K
w
46. 2 Kw 69. 2 Kw 92. 3 Cw 115. 5 Cw 138. 7 K
w
sg w
47. 2 Kw 70. 2 Cw 93. 3 Kw 116. 5 Kw 139. 1 C
st
48. 2 Kw 71. 2 Kw 94. 3 Kw 117. 5 Kw 140. 2 K
w
sg
49. 2 Kw 72. 2 Kw 95. 3 Kw 118. 5 Kw 141. 2
st K
w
50. 2 Kw 73. 2 Kw 96. 3 Kw 119. 6 Kw 142. 3 K
w
sg
51. 2 Kw 74. 2 Cw 97. 4 Kw 120. 6 Kw 143. 3
st
K
w
52. 2 Kw 75. 2 Kw 98. 4 Kw 121. 6 Kw 144. 4
sg K
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53. 2 Kw 76. 2 Kw 99. 4 Kw 122. 6 Kw 145. 4
sg K
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54. 2 Cw 77. 2 Cw 100. 4 Kw 123. 6 Kw 146. 4
sg
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55. 2 Cw 78. 2 APw 101. 4 Kw 124. 6 Kw 147. 4
st K
w
56. 2 Cw 79. 2 APw 102. 4 Kw 125. 6 Kw 148. 6 w
57. 2 Kw 80. 2 Kw 103. 4 Kw 126. 6 Kw sg
149. 6 C
58. 2 Kw 81. 3 Kw 104. 4 Cw 127. 6 Kw st
150. 7 K
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59. 2 K 82. 3 K 105. 4 K 128. 6 K sg
151. 7 K
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60. 2 K 83. 3 K 106. 4 K 129. 6 K K
w
w
C
BriefwExercises
152. 2 AP 154. 4 K 156. 4 K 158. 6 AP 160. 7 AP
153. 2 K 155. 4 AP 157. 4 AP 159. 6 AP 161. 7 AP
sg
w ThiswquestionwalsowappearswinwthewStudywGuide.
st
w Thiswquestionwalsowappearswinwawself-testwatwthewstudentwcompanionwwebsite.
,2w-w2 TestwBankwforwAccountingwPrinciples,wEighthwEditio
n
SUMMARYwOFwQUESTIONSwBYwSTUDYwOBJECTIVESwANDwBLOOM’SwTAXONOMY
Exercises
162. 1 Cw 167. 2 Cw 172. 3 APw 177. 5 ANw 182. 7 APw
163. 1 Cw 168. 2 Cw 173. 3 Cw 178. 6 ANw 183. 7 AP
164. 1 Cw 169. 2 Cw 174. 4 Cw 179. 6 ANw
165. 2 C 170. 2 AP 175. 5 AP 180. 6 AN
166. 2 C 171. 3 C 176. 5 AP 181. 7 AP
CompletionwStatements
184. 1 K 186. 2 K 188. 3 K 190. 4 K 192. 5 K
185. 2 K 187. 2 K 189. 4 K 191. 4 K 193. 7 K
SUMMARYwOFwSTUDYwOBJECTIVESwBYwQUESTIONwTYPE
Item Type Item Type Item Type Item Type Item Type Item Type Item Type
StudywObjectivew1
1. TF 4. TF 40. MC 43. MC 162. Ex 184. C
2. TF 38. MC 41. MC 44. MC 163. Ex
3. TF 39. MC 42. MC 139. MC 164. Ex
StudywObjectivew2
5. TF 14. TF 51. MC 60. MC 69. MC 78. MC 167. Ex
6. TF 31. TF 52. MC 61. MC 70. MC 79. MC 168. Ex
7. TF 32. TF 53. MC 62. MC 71. MC 80. MC 169. Ex
8. TF 45. MC 54. MC 63. MC 72. MC 140. MC 170. Ex
9. TF 46. MC 55. MC 64. MC 73. MC 141. MC 185. C
10. TF 47. MC 56. MC 65. MC 74. MC 152. BE 186. C
11. TF 48. MC 57. MC 66. MC 75. MC 153. BE 187. C
12. TF 49. MC 58. MC 67. MC 76. MC 165. Ex
13. TF 50. MC 59. MC 68. MC 77. MC 166. Ex
StudywObjectivew3
15. TF 81. MC 85. MC 89. MC 93. MC 142. MC 173. Ex
16. TF 82. MC 86. MC 90. MC 94. MC 143. MC 188. C
17. TF 83. MC 87. MC 91. MC 95. MC 171. Ex
18. TF 84. MC 88. MC 92. MC 96. MC 172. Ex
StudywObjectivew4
19. TF 33. TF 101. MC 106. MC 144. MC 155. BE 190. C
20. TF 97. MC 102. MC 107. MC 145. MC 156. BE 191. C
21. TF 98. MC 103. MC 108. MC 146. MC 157. BE
22. TF 99. MC 104. MC 109. MC 147. MC 174. Ex
23. TF 100. MC 105. MC 110. MC 154. BE 189. C
StudywObjectivew5
24. TF 27. TF 112. MC 115. MC 118. MC 177. Ex
25. TF 34. TF 113. MC 116. MC 175. Ex 192. C
26. TF 111. MC 114. MC 117. MC 176. Ex
, ThewRecordingwProcess 2w-w3
SUMMARYwOFwSTUDYwOBJECTIVESwBYwQUESTIONwTYPE
StudywObjectivew6
28. TF 120. MC 124. MC 128. MC 148. MC 178. Ex
29. TF 121. MC 125. MC 129. MC 149. MC 179. Ex
35. TF 122. MC 126. MC 130. MC 158. BE 180. Ex
119. MC 123. MC 127. MC 131. MC 159. BE
StudywObjectivew7
30. TF 132. MC 135. MC 138. MC 160. BE 182. Ex
36. TF 133. MC 136. MC 150. MC 161. BE 183. Ex
37. TF 134. MC 137. MC 151. MC 181. Ex 193. C
Note:www TFw = True-False BEw =wBriefwExercise Cw =w Completion
MCw = MultiplewChoice Exw =w Exercise
Thew chapterw alsow containsw onew setw ofw tenw Matchingw questionsw andw fivew Short-
Answerw Essaywquestions.
CHAPTER STUDY OBJECTIVES
w w
1. Explainwwhatwanwaccountwiswandwhowwitwhelpswinwthewrecordingwprocess.wAnwaccountwiswa
wrecordwof wincreaseswandwdecreaseswinwspecificwasset,wliability, wandwowner'swequitywitems.
2. Definewdebitswandwcreditswandwexplainwtheirwusewinwrecordingwbusinesswtransactions.wT
hewtermsw debitw andw creditw arew synonymousw withw leftw andw right.w Assets,w drawings,w andw expe
nseswarewincreasedwbywdebitswandwdecreasedwbywcredits.wLiabilities,wowner'swcapital,wandwreven
ueswarewincreasedwbywcreditswandwdecreasedwbywdebits.
3. Identifywthewbasicwstepswinwthewrecordingwprocess.wThewbasicwstepswinwthewrecordingwproce
ssware:w(a)wanalyzeweachwtransactionwforwitsweffectswonwthewaccounts,w(b)wenterwthewtransactionwi
nformationwinwawjournal,w(c)wtransferwthewjournalwinformationwtowthewappropriatewaccountswinwthe
wledger.
4. Explainwwhatwawjournalwiswandwhowwitwhelpswinwthewrecordingwprocess.wThew initialwaccoun
tingwrecordwofwawtransactionwiswenteredwinwawjournalwbeforewthewdatawarewenteredwinwthewaccount
s.wAwjournalw(a)wdiscloseswinwonewplacewthewcompleteweffectswofwawtransaction,w(b)wprovidesw aw c
hronologicalw recordw ofw transactions,w andw (c)w preventsw orw locatesw errorsw becausewthewdebitwa
ndwcreditwamountswforweachwentrywcanwbewreadilywcompared.
5. Explainwwhatwawledgerwiswandwhowwitwhelpswinwthewrecordingwprocess.wThewledgerwiswthewe
ntirewgroupwofwaccountswmaintainedwbywawcompany.wThewledgerwkeepswinwonewplacewallwthewinfo
rmationwaboutwchangeswinwspecificwaccountwbalances.
6. Explainwwhatwpostingwiswandwhowwitwhelpswinwthewrecordingwprocess.wPostingwiswthewtransf
erwofwjournalwentrieswtowthewledgerwaccounts.wThiswphasewofwthewrecordingwprocesswaccumulates
wtheweffectswofwjournalizedwtransactionswinwthewindividualwaccounts.
7. Preparewawtrialwbalancewandwexplainwitswpurposes.wAwtrialwbalancewiswawlistwofwaccountswand
wtheirw balancesw atw aw givenw time.w Itsw primaryw purposew isw tow provew thew equalityw of w debitsw a
ndwcreditswafterwposting.wAwtrialwbalancewalsowuncoverswerrorswinwjournalizingwandwpostingwandwi
swusefulwinwpreparingwfinancialwstatements.
, 2w-w4 TestwBankwforwAccountingwPrinciples,wEighthwEditio
n
TRUE-FALSE STATEMENTSw
1. Awnewwaccountwiswopenedwforweachwtransactionwenteredwintowbywawbusinesswfirm.
2. Thew recordingw processw becomesw morew efficientw andw informativew ifw allw transactionsw ar
ewrecordedwinwonewaccount.
3. Whenwthew volumewofwtransactionswiswlarge,wrecordingwthemwinwtabularwformwiswmorewefficie
ntwthanwusingwjournalswandwledgers.
4. AnwaccountwiswoftenwreferredwtowaswawT-accountwbecausewofwthewwaywitwiswconstructed.
5. Awdebitwtowanwaccountwindicateswanwincreasewinwthatwaccount.
6. Ifwawrevenuewaccountwiswcredited,wthewrevenuewaccountwiswincreased.
7. Thewnormalwbalancewofwallwaccountswiswawdebit.
8. Debitwandwcreditwcanwbewinterpretedwtowmeanwincreasewandwdecrease,wrespectively.
9. Thewdouble-
entrywsystemwofwaccountingwreferswtowthewplacementwofwawdoublewlinewatwthewendwofwawcolu
mnwofwfigures.
10. Awcreditwbalancewinwawliabilitywaccountwindicateswthatwanwerrorwinwrecordingwhaswoccurred.
11. Thew drawingw accountw isw aw subdivisionw ofw thew owner'sw capitalw accountw andw appearsw asw
anwexpensewonwthewincomewstatement.
12. Revenueswarewawsubdivisionwofwowner'swcapital.
13. Underwthewdouble-entrywsystem,wrevenueswmustwalwayswequalwexpenses.
14. Transactionsw arew enteredw inw thew ledgerw firstw andw thenw theyw arew analyzedw inw termsw ofw th
eirweffectwonwthewaccounts.
15. Businesswdocumentswcanwprovidewevidencewthatwawtransactionwhaswoccurred.
16. Eachw transactionw mustw bew analyzedw inw termsw ofw itsw effectw onw thew accountsw beforew itw canw
bewrecordedwinwawjournal.
17. Transactionswarewenteredwinwthewledgerwaccountswandwthenwtransferredwtowjournals.
18. Allwbusinesswtransactionswmustwbewenteredwfirstwinwthewgeneralwledger.
19. Awsimplewjournalwentrywrequireswonlywonewdebitwtowanwaccountwandwonewcreditwtowanwaccount.
20. Aw compoundw journalw entryw requiresw severalw debitsw tow onew accountw andw severalw creditsw t
owonewaccount.
21. Transactionswarewrecordedwinwalphabeticworderwinwawjournal.
22. Awjournalwiswalsowknownwaswawbookwofworiginalwentry.
THE RECORDING PROCESS
w w
SUMMARYwOFwQUESTIONSwBYwSTUDYwOBJECTIVESwANDwBLOOM’SwTAXONOMY
Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT
True-FalsewStatements
sg
1. 1 Kw 9. 2 Kw 17. 3 K 25. 5 Kw 33. 4 K
w sg
2. 1 Kw 10. 2 Kw 18. 3 26. 5 Cw 34. 5 K
w
Kw sg w
3. 1 Kw 11. 2 Kw 19. 4 27. 5 Kw 35. 6
Kw sg C
4. 1 Kw 12. 2 Kw 20. 4 28. 6 Kw 36. 7
Kw sg K
w
5. 2 Kw 13. 2 Kw 21. 4 29. 6 Kw 37. 7
Kw K
w
6. 2 Kw 14. 2 Kw 22. 4 30. 7 Kw
Kw sg
7. 2 K 15. 3 K 23. 4 31. 2 K
K sg
8. 2 K 16. 3 K 24. 5 32. 2 K
K
MultiplewChoicewQuestions
38. 1 Kw 61. 2 Kw 84. 3 Cw 107. 4 Kw 130. 6 K
39. 1 Kw 62. 2 Kw 85. 3 Kw 108. 4 Kw 131. 6 K
w
40. 1 Kw 63. 2 Cw 86. 3 Cw 109. 4 Cw 132. 7 K
w
w
41. 1 Cw 64. 2 Cw 87. 3 Kw 110. 4 ANw 133. 7
C
42. 1 Kw 65. 2 Kw 88. 3 Kw 111. 5 Kw 134. 7
K
w
43. 1 Kw 66. 2 Kw 89. 3 Kw 112. 5 Kw 135. 7 w
44. 1 Kw 67. 2 Kw 90. 3 Kw 113. 5 Kw 136. 7 C
45. 2 Kw 68. 2 Kw 91. 3 Kw 114. 5 Kw 137. 7 K
w
46. 2 Kw 69. 2 Kw 92. 3 Cw 115. 5 Cw 138. 7 K
w
sg w
47. 2 Kw 70. 2 Cw 93. 3 Kw 116. 5 Kw 139. 1 C
st
48. 2 Kw 71. 2 Kw 94. 3 Kw 117. 5 Kw 140. 2 K
w
sg
49. 2 Kw 72. 2 Kw 95. 3 Kw 118. 5 Kw 141. 2
st K
w
50. 2 Kw 73. 2 Kw 96. 3 Kw 119. 6 Kw 142. 3 K
w
sg
51. 2 Kw 74. 2 Cw 97. 4 Kw 120. 6 Kw 143. 3
st
K
w
52. 2 Kw 75. 2 Kw 98. 4 Kw 121. 6 Kw 144. 4
sg K
w
53. 2 Kw 76. 2 Kw 99. 4 Kw 122. 6 Kw 145. 4
sg K
w
54. 2 Cw 77. 2 Cw 100. 4 Kw 123. 6 Kw 146. 4
sg
K
w
55. 2 Cw 78. 2 APw 101. 4 Kw 124. 6 Kw 147. 4
st K
w
56. 2 Cw 79. 2 APw 102. 4 Kw 125. 6 Kw 148. 6 w
57. 2 Kw 80. 2 Kw 103. 4 Kw 126. 6 Kw sg
149. 6 C
58. 2 Kw 81. 3 Kw 104. 4 Cw 127. 6 Kw st
150. 7 K
w
59. 2 K 82. 3 K 105. 4 K 128. 6 K sg
151. 7 K
w
60. 2 K 83. 3 K 106. 4 K 129. 6 K K
w
w
C
BriefwExercises
152. 2 AP 154. 4 K 156. 4 K 158. 6 AP 160. 7 AP
153. 2 K 155. 4 AP 157. 4 AP 159. 6 AP 161. 7 AP
sg
w ThiswquestionwalsowappearswinwthewStudywGuide.
st
w Thiswquestionwalsowappearswinwawself-testwatwthewstudentwcompanionwwebsite.
,2w-w2 TestwBankwforwAccountingwPrinciples,wEighthwEditio
n
SUMMARYwOFwQUESTIONSwBYwSTUDYwOBJECTIVESwANDwBLOOM’SwTAXONOMY
Exercises
162. 1 Cw 167. 2 Cw 172. 3 APw 177. 5 ANw 182. 7 APw
163. 1 Cw 168. 2 Cw 173. 3 Cw 178. 6 ANw 183. 7 AP
164. 1 Cw 169. 2 Cw 174. 4 Cw 179. 6 ANw
165. 2 C 170. 2 AP 175. 5 AP 180. 6 AN
166. 2 C 171. 3 C 176. 5 AP 181. 7 AP
CompletionwStatements
184. 1 K 186. 2 K 188. 3 K 190. 4 K 192. 5 K
185. 2 K 187. 2 K 189. 4 K 191. 4 K 193. 7 K
SUMMARYwOFwSTUDYwOBJECTIVESwBYwQUESTIONwTYPE
Item Type Item Type Item Type Item Type Item Type Item Type Item Type
StudywObjectivew1
1. TF 4. TF 40. MC 43. MC 162. Ex 184. C
2. TF 38. MC 41. MC 44. MC 163. Ex
3. TF 39. MC 42. MC 139. MC 164. Ex
StudywObjectivew2
5. TF 14. TF 51. MC 60. MC 69. MC 78. MC 167. Ex
6. TF 31. TF 52. MC 61. MC 70. MC 79. MC 168. Ex
7. TF 32. TF 53. MC 62. MC 71. MC 80. MC 169. Ex
8. TF 45. MC 54. MC 63. MC 72. MC 140. MC 170. Ex
9. TF 46. MC 55. MC 64. MC 73. MC 141. MC 185. C
10. TF 47. MC 56. MC 65. MC 74. MC 152. BE 186. C
11. TF 48. MC 57. MC 66. MC 75. MC 153. BE 187. C
12. TF 49. MC 58. MC 67. MC 76. MC 165. Ex
13. TF 50. MC 59. MC 68. MC 77. MC 166. Ex
StudywObjectivew3
15. TF 81. MC 85. MC 89. MC 93. MC 142. MC 173. Ex
16. TF 82. MC 86. MC 90. MC 94. MC 143. MC 188. C
17. TF 83. MC 87. MC 91. MC 95. MC 171. Ex
18. TF 84. MC 88. MC 92. MC 96. MC 172. Ex
StudywObjectivew4
19. TF 33. TF 101. MC 106. MC 144. MC 155. BE 190. C
20. TF 97. MC 102. MC 107. MC 145. MC 156. BE 191. C
21. TF 98. MC 103. MC 108. MC 146. MC 157. BE
22. TF 99. MC 104. MC 109. MC 147. MC 174. Ex
23. TF 100. MC 105. MC 110. MC 154. BE 189. C
StudywObjectivew5
24. TF 27. TF 112. MC 115. MC 118. MC 177. Ex
25. TF 34. TF 113. MC 116. MC 175. Ex 192. C
26. TF 111. MC 114. MC 117. MC 176. Ex
, ThewRecordingwProcess 2w-w3
SUMMARYwOFwSTUDYwOBJECTIVESwBYwQUESTIONwTYPE
StudywObjectivew6
28. TF 120. MC 124. MC 128. MC 148. MC 178. Ex
29. TF 121. MC 125. MC 129. MC 149. MC 179. Ex
35. TF 122. MC 126. MC 130. MC 158. BE 180. Ex
119. MC 123. MC 127. MC 131. MC 159. BE
StudywObjectivew7
30. TF 132. MC 135. MC 138. MC 160. BE 182. Ex
36. TF 133. MC 136. MC 150. MC 161. BE 183. Ex
37. TF 134. MC 137. MC 151. MC 181. Ex 193. C
Note:www TFw = True-False BEw =wBriefwExercise Cw =w Completion
MCw = MultiplewChoice Exw =w Exercise
Thew chapterw alsow containsw onew setw ofw tenw Matchingw questionsw andw fivew Short-
Answerw Essaywquestions.
CHAPTER STUDY OBJECTIVES
w w
1. Explainwwhatwanwaccountwiswandwhowwitwhelpswinwthewrecordingwprocess.wAnwaccountwiswa
wrecordwof wincreaseswandwdecreaseswinwspecificwasset,wliability, wandwowner'swequitywitems.
2. Definewdebitswandwcreditswandwexplainwtheirwusewinwrecordingwbusinesswtransactions.wT
hewtermsw debitw andw creditw arew synonymousw withw leftw andw right.w Assets,w drawings,w andw expe
nseswarewincreasedwbywdebitswandwdecreasedwbywcredits.wLiabilities,wowner'swcapital,wandwreven
ueswarewincreasedwbywcreditswandwdecreasedwbywdebits.
3. Identifywthewbasicwstepswinwthewrecordingwprocess.wThewbasicwstepswinwthewrecordingwproce
ssware:w(a)wanalyzeweachwtransactionwforwitsweffectswonwthewaccounts,w(b)wenterwthewtransactionwi
nformationwinwawjournal,w(c)wtransferwthewjournalwinformationwtowthewappropriatewaccountswinwthe
wledger.
4. Explainwwhatwawjournalwiswandwhowwitwhelpswinwthewrecordingwprocess.wThew initialwaccoun
tingwrecordwofwawtransactionwiswenteredwinwawjournalwbeforewthewdatawarewenteredwinwthewaccount
s.wAwjournalw(a)wdiscloseswinwonewplacewthewcompleteweffectswofwawtransaction,w(b)wprovidesw aw c
hronologicalw recordw ofw transactions,w andw (c)w preventsw orw locatesw errorsw becausewthewdebitwa
ndwcreditwamountswforweachwentrywcanwbewreadilywcompared.
5. Explainwwhatwawledgerwiswandwhowwitwhelpswinwthewrecordingwprocess.wThewledgerwiswthewe
ntirewgroupwofwaccountswmaintainedwbywawcompany.wThewledgerwkeepswinwonewplacewallwthewinfo
rmationwaboutwchangeswinwspecificwaccountwbalances.
6. Explainwwhatwpostingwiswandwhowwitwhelpswinwthewrecordingwprocess.wPostingwiswthewtransf
erwofwjournalwentrieswtowthewledgerwaccounts.wThiswphasewofwthewrecordingwprocesswaccumulates
wtheweffectswofwjournalizedwtransactionswinwthewindividualwaccounts.
7. Preparewawtrialwbalancewandwexplainwitswpurposes.wAwtrialwbalancewiswawlistwofwaccountswand
wtheirw balancesw atw aw givenw time.w Itsw primaryw purposew isw tow provew thew equalityw of w debitsw a
ndwcreditswafterwposting.wAwtrialwbalancewalsowuncoverswerrorswinwjournalizingwandwpostingwandwi
swusefulwinwpreparingwfinancialwstatements.
, 2w-w4 TestwBankwforwAccountingwPrinciples,wEighthwEditio
n
TRUE-FALSE STATEMENTSw
1. Awnewwaccountwiswopenedwforweachwtransactionwenteredwintowbywawbusinesswfirm.
2. Thew recordingw processw becomesw morew efficientw andw informativew ifw allw transactionsw ar
ewrecordedwinwonewaccount.
3. Whenwthew volumewofwtransactionswiswlarge,wrecordingwthemwinwtabularwformwiswmorewefficie
ntwthanwusingwjournalswandwledgers.
4. AnwaccountwiswoftenwreferredwtowaswawT-accountwbecausewofwthewwaywitwiswconstructed.
5. Awdebitwtowanwaccountwindicateswanwincreasewinwthatwaccount.
6. Ifwawrevenuewaccountwiswcredited,wthewrevenuewaccountwiswincreased.
7. Thewnormalwbalancewofwallwaccountswiswawdebit.
8. Debitwandwcreditwcanwbewinterpretedwtowmeanwincreasewandwdecrease,wrespectively.
9. Thewdouble-
entrywsystemwofwaccountingwreferswtowthewplacementwofwawdoublewlinewatwthewendwofwawcolu
mnwofwfigures.
10. Awcreditwbalancewinwawliabilitywaccountwindicateswthatwanwerrorwinwrecordingwhaswoccurred.
11. Thew drawingw accountw isw aw subdivisionw ofw thew owner'sw capitalw accountw andw appearsw asw
anwexpensewonwthewincomewstatement.
12. Revenueswarewawsubdivisionwofwowner'swcapital.
13. Underwthewdouble-entrywsystem,wrevenueswmustwalwayswequalwexpenses.
14. Transactionsw arew enteredw inw thew ledgerw firstw andw thenw theyw arew analyzedw inw termsw ofw th
eirweffectwonwthewaccounts.
15. Businesswdocumentswcanwprovidewevidencewthatwawtransactionwhaswoccurred.
16. Eachw transactionw mustw bew analyzedw inw termsw ofw itsw effectw onw thew accountsw beforew itw canw
bewrecordedwinwawjournal.
17. Transactionswarewenteredwinwthewledgerwaccountswandwthenwtransferredwtowjournals.
18. Allwbusinesswtransactionswmustwbewenteredwfirstwinwthewgeneralwledger.
19. Awsimplewjournalwentrywrequireswonlywonewdebitwtowanwaccountwandwonewcreditwtowanwaccount.
20. Aw compoundw journalw entryw requiresw severalw debitsw tow onew accountw andw severalw creditsw t
owonewaccount.
21. Transactionswarewrecordedwinwalphabeticworderwinwawjournal.
22. Awjournalwiswalsowknownwaswawbookwofworiginalwentry.
