1. What is the difference between an account and a ledger? 2. Do the terms debit...

 

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1. What is the difference between an account and a ledger? 2. Do the terms debit and credit signify an increase or a decrease, or can they signify either? Explain. 3. Explain why the rules of debit and credit are the same for liability accounts and owner's equity accounts. 4. What is the effect (increase or decrease) of a debit to an expense account (a) in terms of owner's equity and (b) in terms of expense? 5. What is the effect (increase or decrease) of a credit to a revenue account (a) in terms of owner's equity and (b) in terms of revenue? 6. Weir Company adheres to a policy of depositing all cash receipts in a bank account and making all payments by cheque. The cash account as at March 31 has a credit balance of $3,190, and there is no undeposited cash on hand. (a) Assuming no errors occurred during journalizing or posting, what caused this unusual balance? (b) Is the $3,190 credit balance in the cash account an asset, a liability, owner's equity, a revenue, or an expense? 1. What is the difference between an account and a ledger? 2. Do the terms debit and credit signify an increase or a decrease, or can they signify either? Explain. 3. Explain why the rules of debit and credit are the same for liability accounts and owner's equity accounts. 4. What is the effect (increase or decrease) of a debit to an expense account (a) in terms of owner's equity and (b) in terms of expense? 5. What is the effect (increase or decrease) of a credit to a revenue account (a) in terms of owner's equity and (b) in terms of revenue? 6. Weir Company adheres to a policy of depositing all cash receipts in a bank account and making all payments by cheque. The cash account as at March 31 has a credit balance of $3,190, and there is no undeposited cash on hand. (a) Assuming no errors occurred during journalizing or posting, what caused this unusual balance? (b) Is the $3,190 credit balance in the cash account an asset, a liability, owner's equity, a revenue, or an expense?

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1 Account is a place where transactions are recorded Ledger is a place where accounts are maintained ... View the full answer