AM I READY FOR O LEVELS... PART 1 (5NA)

Double entry recording =

• ONLY two accounts affected

• AT LEAST two accounts affected

Double entry for depreciation

• DR depreciation CR accumulated depreciation

• DR accumulated depreciation CR depreciation

NOT related to depreciation.

• Matching

• Prudence

• Accounting entity

• Consistency

Business and owner are separate entities.

• Matching

• Prudence

• Accounting entity

• Accounting unit

Sharifah sold goods to Wei Xiang. In Wei Xiang's books:

• Sharifah = Trade RECEIVABLE

• Sharifah = Trade PAYABLE

• Wei Xiang = Trade RECEIVABLE

• Wei Xiang = Trade PAYABLE

NOT an asset.

• cash at bank

• fixtures and fittings

• cash at bank (overdrawn)

• motor vehicles

NOT an expense

• depreciation

• impairment loss on inventory

• impairment loss on trade receivables

• accumulated depreciation

DR = + . NOT for this.

• rental expense

• discount allowed

• discount received

• cash in hand

NOT a liability

• drawings

• loan

• long term borrowings

• trade payables

the CORRECT one.

• Assets = Liability - Equity

• Assets - Equity = Liability

• Assets + Liability = Equity

• Assets + Equity = Liability