BASIC ACCOUNTING PROCEDURES
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One-liners from this chapter
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What is the fundamental accounting equation?
The fundamental accounting equation is Assets = Liabilities + Capital (Owner's Equity), which must always remain in balance after every financial transaction.
What is the meaning of 'credit' in double-entry bookkeeping?
Credit records an increase in liabilities or income.
What is the meaning of the term 'debit' in double-entry bookkeeping?
Debit refers to the left side of a ledger account; it increases asset and expense accounts while decreasing liability, capital, and income accounts.
What is a source document in accounting?
Original evidence supporting a financial transaction record.
What is a journal entry in accounting?
A journal entry is the first formal record of a financial transaction, recorded in chronological order in the journal book with equal debit and credit amounts.
What is the business entity concept in accounting?
Business is treated as separate from its owner.
What is meant by 'double-entry bookkeeping'?
Double-entry bookkeeping is a system where every transaction affects at least two accounts — one account is debited and another is credited — ensuring the books always balance.
What is the money measurement concept in accounting?
Only transactions measurable in money terms are recorded.
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