Question: 1. What types of transactions increase equity? What types decrease equity?
2. Why are accounting systems called double-entry?
3. For each transaction, double-entry accounting requires which of the following? (a) Debits to asset accounts must create credits to liability or equity accounts, (b) a debit to a liability account must create a credit to an asset account, or (c) total debits must equal total credits.
4. Explain what a compound journal entry is.