(a)
Journal:
Journal is the book of original entry. Journal consists of the day-to-day financial transactions in a chronological order. The journal has two aspects; they are debit aspect and the credit aspect.
Rules of debit and credit:
“An increase in an asset account, an increase in an expense account, a decrease in liability account, and a decrease in a revenue account should be debited.
Similarly, an increase in liability account, an increase in a revenue account and a decrease in an asset account, a decrease in an expenses account should be credited”.
Net income:
The net income is the difference between the total revenue, and the total expenses. The net income can be computed as:
To prepare: The correct
(b)
The incorrect entries that would prevent the trial balance from balancing.
(c)
To compute: The correct net income for the month of May.
(d)
The correct cash balance at May, 31.
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FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
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