Debit
On a T-chart, which side is the Debit on?
Left
On A T-Chart where is Credit?
Right
What shape is a T-account?
A "T" shape.
Is increasing a "Mortgage" a debit or credit?
A credit.
True or false , DEBIT INCREASES you liabilities.
False
“Your company buys supplies for $300 cash”
Which account is being credited?
CASH
What side is the debit side?
The left side.
Is increasing supplies a debit or credit?
A debit.
What is Debit?
An entry into an account that is on the left side. Typically has something to do with an increase of something in an account. (answers may vary)
When looking at the account owners equity on a T-chart CREDIT
INCREASES OR DECREASES
Owners equity?
INCREASES
What is the purpose of a account page (ledger)?
To record financial changes in accounts in an organized manor.
Will our Owner's Equity be debited it credited when taking out money of the bussiness?
It will be debited.
”You perform a service for a person, they decide to pay you the $400 in cash”
Which ACCOUNT is being Debited?
The ACCOUNT that is being increased or Debited is “CASH”/”BANK”
What is the definition of CREDIT?
An entry into an account that goes on the right side. Typically has something to do with a decrease of something in an account. (Answers may vary)
What can you create with a ledger?
A balance sheet.
A new air conditioning is purchased on credit from Air and Co. How is cash impacted.
Cash is not impacted. A/P and Equipment are the only accounts effected.
”Your company sold a truck for $8 000 that was originally priced at $10 000, The buyer pays $4000 up front and puts the rest of the total on account.”
Which ACCOUNTS in this scenario are being debited?
Cash - Debit $4000
A/R - Debit $4000
OE - Debit $2000
” You have to pay the bills. The bill totals up to $6750, You decide to pay $750 cash and pay the rest on account.”
Which accounts are being credited?
Cash $750
A/P $6000
What are 3 ways you may have an exceptional balance?
1. You overpay an account payable.
2. A customer without an account returns merchandise on account/credit.
3. You return goods on account/credit to a supplier you don't have an account with.
A used car costing $8000 is bought from Nissan Canada. A cash payment for $2500 was made upfront and the res of the balance is to be paid at a later date. Is cash to be debited or credited?
Cash is credited.