Accounting and Bookkeeping

Question 1

List responsibilities of an accountant

Answer 1

Provide reliable and relevant information
Auditing
Introduce accounting procedures to businesses
Prepare financial statements
Analyse financial information
Financial advice for businesses
Produce budgets
Ensure statements and tax is submitted on time

Question 2

Management accounting

Answer 2

Focuses on planning, control and decision making within the business.
Information is used internally by managers and senior employees to make decisions

Question 3

Financial accounting

Answer 3

Using historical information to prepare financial statements

Question 4

Describe the role of a bookkeeper

Answer 4

Recording day to day transactions
Maintaining accounting records
Entering transactions in the BoPE
Checking the accuracy of records

Question 5

Why should you keep accounting records

Answer 5

To quantify items such as sales showing what has happened in the past
To record amounts due from TR and to TP
Reduce risk of fraud
Enables production of financial statements
Production of forecasts
Monitor performance
Provide information to the owner

Question 6

What is the Accounting Equation?

Answer 6

A = C+L

Question 7

What is an asset?

Answer 7

something you own

Question 8

What is a liability?

Answer 8

something you owe

Question 9

What is capital?

Answer 9

resources/money supplied by the owner

Question 10

Give 3 examples of assets

Answer 10

vehicles, equipment, property, fixtures, inventory, cash, bank

Question 11

Give 2 examples of liabilities

Answer 11

loan, mortgage, trade payable

Question 12

what is meant by dual aspect?

Answer 12

every transaction has 2 effects

Question 13

What is a ledger?

Answer 13

A book/spreadsheet that records T accounts

Question 14

What does a T account record?

Answer 14

All information related to a particular item

Question 15

What do you call the left hand side of a T account?

Answer 15

Debit

Question 16

What do you call the right hand side of a T account?

Answer 16

Credit

Question 17

What do you record at the top of a T account?

Answer 17

the name of the account

Question 18

What do you do to increase an asset?

Answer 18

Dr

Question 19

What do you do to increase a liability?

Answer 19

Cr

Question 20

What do you do to increase capital?

Answer 20

Cr

Question 21

What do you do to decrease an asset?

Answer 21

Cr

Question 22

What do you do to decrease a liability ?

Answer 22

Dr

Question 23

What do you do to decrease capital?

Answer 23

Dr

Question 24

How do you know what label to use for an entry in a T account?

Answer 24

It is the name of the other account involved in the transaction

Question 25

What do you call it when the owner takes money out for his/her own use?

Answer 25

Drawings

Question 26

What are Sales Returns also known as and what side of the account do you make an entry on?

Answer 26

Returns In; Dr - increase asset of inventory

Question 27

What are Purchase Returns also known as and what side of the account do you make an entry on?

Answer 27

Returns Out; Cr - decrease asset of inventory

Question 28

What is stock also known as?

Answer 28

Inventory

Question 29

Explain what is meant by Purchases and what type of account is Purchases?

Answer 29

Goods bought to sell on; Asset a/c

Question 30

What do you do in a Sales a/c… Dr or Cr?... Why?

Answer 30

Cr - decrease Asset of inventory

Question 31

What do you call people you sell to on credit and what TYPE of account are they?

Answer 31

Trade RECEIVABLES - Asset a/c… you OWN their debt

Question 32

What do you call people you buy from on credit and what TYPE of account are they?

Answer 32

Trade PAYABLES - Liability a/c… you OWE the debt

Question 33

Name the 2 a/cs in this transaction AND identify Dr and Cr - Bought goods on credit from G Hunter

Answer 33

Dr Purchases; Cr G Hunter

Question 34

Name the 2 a/cs in this transaction AND identify Dr and Cr - Returned goods to T Hughes

Answer 34

Dr T Hughes; Cr Purchase Returns

Question 35

Name the 2 a/cs in this transaction AND identify Dr and Cr - J Reid returned goods to us

Answer 35

Dr Sales Returns; Cr J Reid

Question 36

Name the 2 a/cs in this transaction AND identify Dr and Cr - Sold goods to J Kane on credit

Answer 36

Name the 2 a/cs in this transaction AND identify Dr and Cr - Sold goods to J Kane on credit

Question 37

Give 3 examples of expenses

Answer 37

Wages, insurance, electricity, heat and light, rent

Question 38

Give 2 examples of income (other than Sales)

Answer 38

rent received, interest received, commission received, dicount received

Question 39

What do you do to an Expense a/c?

Answer 39

Dr

Question 40

What do you do to an Income a/c?

Answer 40

Cr

Question 41

What do you do to the Drawings a/c?

Answer 41

Dr

Question 42

What do we mean by the balance of a T a/c?

Answer 42

The different between the totals of each side

Question 43

What do we call the balance below the totals?

Answer 43

Balance b/d

Question 44

What do we call the balance above the totals?

Answer 44

Balance c/d

Question 45

What 2 things are important about the totals when we balance a T a/c?

Answer 45

They are the same and they are parallel