BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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has equal debits and credits
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generally extends to several pages
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does not require narration
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all of these
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Detailed explanation-1: -Keep in mind that your debits and credits must be equal in a compound journal entry. If you have more than one debit and only one credit, the sum of your debits must equal the credit. Likewise, if you have more than one credit and only one debit, the sum of your credits must equal the debit.
Detailed explanation-2: -Note that each journal entry records both a debit and a credit for every transaction, and the two amounts on either side must equal each other so that the fundamental accounting equation stays in balance.
Detailed explanation-3: -A compound journal entry is an entry in which there is more than one debit, more than one credit, or more than one of both debits and credits. It is a combination of several simple journal entries.
Detailed explanation-4: -All the journal entries illustrated so far have involved one debit and one credit; these journal entries are called simple journal entries. Many business transactions, however, affect more than two accounts. The journal entry for these transactions involves more than one debit and/or credit.
Detailed explanation-5: -An example of a compound journal entry is a payroll entry, where there is a debit to salaries expense, another debit to payroll taxes expense, and credits to cash and a variety of deduction accounts.