Look at the following financial ledger:
| | A | B |
|---|-----------------|-----------------|
| 1 | Transaction | Amount |
| 2 | Gift | $ 45.00 |
| 3 | Credit bill | -$33.69 |
| 4 | Online auction | $ 16.75 |
| 5 | Insurance payment | -$66.41 |
| 6 | Craft fair | -$24.25 |
Which items listed on the ledger represent credits?
a. Credit bill and craft fair
b. Gift and online auction
c. Gift and insurance payment
d. Online auction and craft fair
Please select the best answer from the choices provided
Answer (2)
The items in the ledger representing credits are the 'Credit bill' and 'Craft fair', both of which have negative amounts. Thus, the best answer to the question is option (a): 'Credit bill and craft fair'.
;
Credits are represented by negative amounts in the ledger.
Identify transactions with negative amounts: Credit bill (-$33.69), Insurance payment (-$66.41), and Craft fair (-$24.25).
Evaluate the options and select the one that includes credits.
The best answer from the given choices is a. Credit bill and craft fair, as it includes only credits. Therefore, the answer is a .
Explanation
Understanding the Problem We are given a financial ledger and asked to identify which transactions represent credits. Credits are typically represented by negative amounts in a ledger. We need to examine the ledger and identify the transactions with negative amounts.
Identifying Credits The ledger contains the following transactions and amounts:
Gift: $45.00
Credit bill: -$33.69
Online auction: $16.75
Insurance payment: -$66.41
Craft fair: -$24.25
We can see that the 'Credit bill', 'Insurance payment', and 'Craft fair' have negative amounts.
Matching with the Options Now, let's check the given options to see which one matches our findings:
a. Credit bill and craft fair b. Gift and online auction c. Gift and insurance payment d. Online auction and craft fair
None of the options perfectly match our findings. However, option 'a' is the closest, as it includes 'Credit bill' and 'Craft fair', which are indeed credits. The full list of credits is 'Credit bill', 'Insurance payment', and 'Craft fair'.
Selecting the Best Answer Based on the ledger, the items representing credits are 'Credit bill', 'Insurance payment', and 'Craft fair'. However, since we must choose from the given options, the best answer is the one that includes at least some of the credits. Option a, 'Credit bill and craft fair', is the only option that includes only credits and no debits.
Examples
Understanding financial ledgers and identifying credits and debits is crucial in personal finance and accounting. For example, when managing a bank account, credits represent deposits or income, while debits represent withdrawals or expenses. Accurately tracking these transactions helps in budgeting, financial planning, and ensuring that your account balances are correct. This skill is also fundamental in business for managing cash flow and financial reporting.
