Unit 4.1 to 4.4 - Analysis of Business Transactions, Journalizin

Front

What happens to assets and owner's equity when salaries are paid to employees?

Back

Decrease assets and owner's equity.

Front

What is the effect on owner's equity when a building valued at ₱200M with a ₱55M mortgage is invested into an entity?

Back

Increase owner's equity by ₱145M.

Front

What is the journal entry effect when services worth ₱2,000 are provided and cash is received immediately?

Back

Service revenue is credited for ₱2,000.

Front

If only the credit part of a journal entry is posted, what happens to the asset values?

Back

Assets may not always be overstated; it depends on the specific accounts involved.

Front

What type of journal entry consists of one debit and one credit?

Back

Simple journal entry.

Front

What is the definition of a journal entry?

Back

A record of a financial transaction in accounting, showing the accounts affected and the amounts.

Front

What is the purpose of journalizing in accounting?

Back

To systematically record financial transactions for accurate financial reporting.

Front

What is the difference between a debit and a credit in accounting?

Back

A debit increases asset or expense accounts and decreases liability or equity accounts; a credit does the opposite.

Front

What does it mean to post a journal entry?

Back

To transfer the information from the journal to the ledger accounts.

Front

What is the accounting equation?

Back

Assets = Liabilities + Owner's Equity.