Accounting Questions and Answers

Wages should be charged in the trading account only if shown separately on the trial balance from salaries. In such circumstances, the assumption, unless you are otherwise told, is that the wage is a direct trading expense to be included in the trading account while salary is an Indirect (i.e overhead) expense to be included in the P & L account.

When a purchase was made, a credit purchase invoice would have been issued by the supplier, Tosanwumi International, which would be signed by Mr. Roi as evidence of his acceptance of liability to pay for the goods.

The two accounts needed to record this transaction are the purchase Account and Tosanwumi International Account. purchase account would be debited while the Tosanwumi International Account credited.

 A personal account is an account for use by an individual for that person's own needs. A few examples of personal accounts include debtors, creditors, banks, outstanding/prepaid accounts, accounts of credit customers, accounts of goods suppliers, capital, drawings, etc.

impersonal accounts: Accounts which are not held in the name of the persons or are directly related to the customers or suppliers of a business.  a. Real Accounts, e.g. Asset Account; and, 2. Nominal Accounts, e.g. Income and Expenditure Accounts.

Double-entry accounting is easy to prepare and helps guarantee accurate financial records by revealing data entry errors. Double-entry accounting provides a complete record of financial transactions for a business.

A ledger is a separate record within the general ledger that is assigned to a specific asset, liability, equity item, revenue type, or expense type. Examples of ledger accounts are: Cash, Accounts receivable.