The following excerpt is from a conversation between Kate Purvis, the president and chief operating officer of Light House Company, and her neighbor, Dot Evers.

Dot: Kate, Im taking a course in night school, Intro to Accounting. I was wonderingcould you answer a couple of questions for me?

Kate: Well, I will if I can.

Dot: Okay, our instructor says that its critical we understand the basic concepts of accounting, or well never get beyond the first test. My problem is with those rules of debit and credit you know, assets increase with debits, decrease with credits, etc.

Kate: Yes, pretty basic stuff. You just have to memorize the rules. It shouldn't be too difficult.

Dot: Sure, I can memorize the rules, but my problem is I want to be sure I understand the basic concepts behind the rules. For example, why cant assets be increased with credits and decreased with debits like revenue? As long as everyone did it that way, why not? It would seem easier if we had the same rules for all increases and decreases in accounts. Also, why is the left side of an account called the debit side? Why couldn't it be called something simple like the LE for Left Entry? The right side could be called just RE for Right Entry. Finally, why are there just two sides to an entry? Why cant there be three or four sides to an entry?

After listening to the conversation between Kate and Dot, help Kate answer Dots questions.

What information (other than just debit and credit journal entries) could the accounting system gather that might be useful to Kate in managing Light House Company?