QS# 2, 9,17
What is the difference between a note payable and an account payable? If an incorrect amount is journalized and posted to the accounts, how should the error be created? Review the Article Cat balance sheet in Appendix A. Identify an asset with the word receivable in its account title and a liability with the word payable in its account title.
Solution
1. a) Asset Account- Cash Account and Fixed Asset A/C
b) Liability A/C= Creditors A/c & Bills Payable A/c
c) Equity A/C= Equity Sharesholders A/C
2. Notes Payable are bills payable which are issued if purchases are made on credit for a specified period, generally on which interest is also paid. Accounts Payable is the account credited when purchases are made on credit & time period is not specified.
4. Transactions like Asset Sales, Depreciation, Interest Income are recorded in General Journal
6.A transaction is first recorded in journal and then transferred to ledger Account because first we have to journalise the transaction as per the accounting principles.
7. As per the accounting priciple 1) Dr all asset & credit all liabilities and 2) Debit all expense & Credit all incomes
so the asset is having debit balance as well as of the expense account.
8. A record keeper prepares trial balnce to get the net balances of all account. It is the first step of the financial statement.
9 If an incorrecr amount is journalised and posted to account then it can be corrected by passing an entry of the difference amount or reversing the entry and then passing the correct entry.
10. Financial Statements are:- Profit & loss A/C, Balance Sheet, cash Flow Statement and Trial balance
11. Balance of all assts and liabilities are reported in balance sheets.
12. all income and expenses for the year are reported in an income statement.
13. The user of income statement need to know the time period of the income statement to understand that the company has earned the arrived profit in how much time.
14. Assets-An asset is a resouce that can be tangible as well, as intangible and having economic value owned by an individual or corporation.
Liabilty-It is a disadvantage or sacrifice of the economic benefits. Examples are loans, Creditors etc.
Net Assets= It is difference of Assets - Liabilities of the companies.
15. Balance Sheet is called as the statement of financial position as it reflects the financial position of the company.
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QS# 2- 9-17 What is the difference between a note payable and an accou.docx
1. QS# 2, 9,17
What is the difference between a note payable and an account payable? If an incorrect amount is
journalized and posted to the accounts, how should the error be created? Review the Article Cat
balance sheet in Appendix A. Identify an asset with the word receivable in its account title and a
liability with the word payable in its account title.
Solution
1. a) Asset Account- Cash Account and Fixed Asset A/C
b) Liability A/C= Creditors A/c & Bills Payable A/c
c) Equity A/C= Equity Sharesholders A/C
2. Notes Payable are bills payable which are issued if purchases are made on credit for a
specified period, generally on which interest is also paid. Accounts Payable is the account
credited when purchases are made on credit & time period is not specified.
4. Transactions like Asset Sales, Depreciation, Interest Income are recorded in General Journal
6.A transaction is first recorded in journal and then transferred to ledger Account because first
we have to journalise the transaction as per the accounting principles.
7. As per the accounting priciple 1) Dr all asset & credit all liabilities and 2) Debit all expense &
Credit all incomes
so the asset is having debit balance as well as of the expense account.
8. A record keeper prepares trial balnce to get the net balances of all account. It is the first step of
the financial statement.
9 If an incorrecr amount is journalised and posted to account then it can be corrected by passing
an entry of the difference amount or reversing the entry and then passing the correct entry.
2. 10. Financial Statements are:- Profit & loss A/C, Balance Sheet, cash Flow Statement and Trial
balance
11. Balance of all assts and liabilities are reported in balance sheets.
12. all income and expenses for the year are reported in an income statement.
13. The user of income statement need to know the time period of the income statement to
understand that the company has earned the arrived profit in how much time.
14. Assets-An asset is a resouce that can be tangible as well, as intangible and having economic
value owned by an individual or corporation.
Liabilty-It is a disadvantage or sacrifice of the economic benefits. Examples are loans, Creditors
etc.
Net Assets= It is difference of Assets - Liabilities of the companies.
15. Balance Sheet is called as the statement of financial position as it reflects the financial
position of the company.
