Critical Thinking Question

Decision Case 2-2

Answer the following questions. Consider each question separately.

Requirements

1.Explain the advantages of double-entry bookkeeping instead of recording transactions in terms of the accounting equation to a friend who is opening a used book store.

2.When you deposit money in your bank account, the bank credits your account. Is the bank misusing the word credit in this context? Why does the bank use the term credit instead of debit to refer to your deposit?