Question 1

1. In the process of recording accounting transactions, what is the difference between the general journal and the general ledger? (3 marks)

2. For each of the transactions identified below, state how the asset, liability and/or equity accounts increase or decrease. Name the account and indicate whether it would be recorded as a Debit or Credit. (15 Marks)

	ASSETS	LIABILITIES	EQUITY
Eg. Owner contributes $5000 cash to the business.	Increase. Debit Cash $5,000		Increase. Credit Contributed Capital $5000
a. Obtained a loan to buy equipment for $40,000.
b. Received $3000 in inventory goods from supplier on suppliers credit.
c. Sold the goods in b.
d. Invoiced the customer $6000 for the sale in c.
e. Paid the supplier in b. $3000
f. Paid GST (tax) of $2000