Account 1 Marks Question

An account is divided into two sides. The left side of an account is known as debit and the credit.

Machinery Account should be debited for wages paid for installation of machinery.

Assets, Liabilities and Capital Accounts are balanced.

Ledger is a book which contains, in a summarised and classified form, a permanent record of all transactions.

Balancing an account means totalling the two sides and striking the difference. The difference is written in the column with shorter balance and is carried forward as it balance in the next accounting period.

Expense and Revenue Accounts are not balanced. They are totalled and transferred to Trading Account and Profit and Loss Account at the end of the accounting year.