Chapter 4, Problem 1.1SRE

The part of the journal entry to be recorded first is the:

1. a. asset.
2. b. credit.
3. c. debit.
4. d. liability.

To determine

Identify the part of journal entry to be recorded first.

Answer to Problem 1.1SRE

Option (c).

Explanation of Solution

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit: A debit, is an accounting term that refers to the left side of an account. The term debit is be denoted by (Dr). The recording amount on the left side of the account is known as debiting.

Credit: A credit, is an accounting term that refers to the right side of an account. The term credit is denoted as (Cr). The recording amount on the right side of the account is known as crediting.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

• Debit, all the increase in the assets, the expenses and the dividends, all the decrease in liabilities, revenues and the stockholders’ equities.
• Credit, all the increase in the liabilities, the revenues, and the stockholders’ equities, and all decreases in the assets, and the expenses.

In the journal entry Debit is first recorded followed by the credit, for the respective incomes and expenses.

Option (c):

As per the above explanation Option c, is the correct answer.

Option (a):

As per the above explanation Option a, is an incorrect answer.

Option (b):

As per the above explanation Option b, is an incorrect answer.

Option (d):

As per the above explanation Option d, is an incorrect answer.

Conclusion

Therefore, Option (c) is the correct answer.