Exam 5: Recording, Storing and Reporting Accounting Information

Explain what is shown in the statement of changes in owner's equity.

Asset accounts:

Explain the use of subsidiary ledgers.

Debit amounts are always recorded on the left of the T-account and the credit amount is always recorded on the right side of the T-account.

When posting occurs the accounting cycle becomes source document ? transaction ? journal ? ledger.

Liability accounts:

Liability accounts are ___________ by credit entries and ___________ by debit entries.

Outline the purpose of a chart of accounts.

The adjusting entry for depreciation is debit (increase) to the contra-asset account Accumulated Depreciation and a credit (decrease) to the expense account Depreciation Expense.