SUBDIVISION OF CAPITAL ACCOUNT 61 



6. Does the Capital account show the same net capital under 



either method? Why? 



7. Name five accounts that have been used to record increases 



and decreases in capital. 



8. What is an Expense account? An Income account? A 



Nominal account? 



9. What is the purpose of the Loss and Gain account? 



10. Discuss its relation to the several expense and income ac- 



counts. 



11. Discuss its relation to the Proprietor's Capital account. 



12. Describe the bookkeeping process of transferring balances 



from the expense accounts to Loss and Gain account. 



13. Describe the process of transferring balances from the in- 



come accounts to Loss and Gain account. 



14. Describe the process of transferring the balance from the 



Loss and Gain account to the Capital account. 



15. Why are the entries mentioned in questions 12, 13 and 14 



called closing entries? 



16. What do the horizontal double lines mean in an account? The 



single lines? 



17. What is the difference between a Loss and Gain account and 



a Loss and Gain Statement? 



18. Under the second method of recording increases and de- 



creases in capital, why is the balance transferred from 

 Loss and Gain account exactly equal to the net results 

 of the Capital account entries of the year under the first 

 method ? 



19. Describe the process of bringing down the balance of Capital 



account. 



20. Why is it customary to bring down the balance? 



21. How is the equilibrium of debits and credits maintained in 



bringing down the balance? 



22. What do the double lines mean in the Capital account in this 



connection ? 



23. Give two classifications of accounts. 



24- Of what value is a classification of accounts? 



25. What is a personal account? A real account? 



26. Name two of each. 



