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POA - Journal Entries

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  • Sold goods on credit.
    Accounts receivable is debited and Sales is credited.
  • Explain the term 'Expenses'.
    Costs incurred by the business to generate revenue and to ensure operation of the business.
  • Bought equipment, paying three quarters by cash and the other quarter by cheque.
    Equipment is debited and, Cash is credited and Bank is credited.
  • What is meant by the term 'Revenue'?
    Income gained by the daily operations of the business.
  • Cash invested into the business.
    Cash is debited and Capital is credited.
  • Paid Insurance using a cheque.
    Insurance is debited and Bank is credited.
  • What is Capital?
    The money invested into a business to start and operate the business.
  • Purchased goods on credit.
    Purchases is debited and Accounts Payable is credited.
  • What is a liability?
    A business' financial obligation that is outstanding and must be paid for.
  • What is an asset?
    Property owned by the business to be used for a profit.
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