Principles of Accounting 100

1. Discuss your understanding of Double Entry Book-Keeping.

2. (a) Explain the purpose of the two accounts: Depreciation Expense and Accumulated Depreciation.

(b) What is the normal balance of each account? (c) Is it customary for the balances of the two

accounts to be equal in amount? (d) In what financial statements, if any, will each account appear?

3. Explain your understanding of (a) the revenue recognition principle and (b) the expense recognition principle. Discuss how these principles are related to the accrual basis of accounting.

4. Why are closing entries required at the end of an accounting period? What is the difference between adjusting entries and closing entries?

5. Discuss your understanding of Accounting, who uses accounting information and the importance

of maintaining accounting data.

6. If the two totals of a trial balance are equal, does it mean that there are no errors in the accounting records? Explain.