accounting exam

Question 1

preparing and recording information in the accounting records

Answer 1

bookkeeping

Question 2

maturity date

Answer 2

payment dude date of any liability

Question 3

cost principle

Answer 3

assets are valued according to the cost principle. When a business acquires an asset. The value of the asset is recorded at its actual cost to the business either its acquisition cost or its construction cost.

Question 4

liquidity order

Answer 4

is the order in which current assets would likely be converted to cash.

Question 5

account recievable

Answer 5

refers to the total amount due from debtors usually within 30 days.

Question 6

equities

Answer 6

are claimed by both creditors and owners against the assets of a company

Question 7

business entitiy principle

Answer 7

requires that each business be considered a seperate entity, and that the financial data for each each business be kept seperate from the owners personal financial data

Question 8

is a financial statement that lists the assets liabilities and owners equity at a specific date

Answer 8

balance sheet

Question 9

what is the purpose of accounting

Answer 9

to provide financial information for decision making

Question 10

is the financial status of a person or company represented by the assets , liabilties and net worth or personal equity.

Answer 10

financial position

Question 11

items of value owned by a business and person

Answer 11

assets

Question 12

the debts of a person or a business

Answer 12

liabilities

Question 13

a persons net worth

Answer 13

personal equity

Question 14

a person or business that extended credit or loaned money to another individual or business

Answer 14

creditor

Question 15

is the difference between the value of items owned and the debts owed

Answer 15

personal net worth

Question 16

an exchange of things of value

Answer 16

business transaction

Question 17

the period of time covered by the financial statements

Answer 17

accounting periods

Question 18

the principles rules and guidelines followed when preparing and presenting accounting infromation

Answer 18

accounting standards

Question 19

non profit organizations similar to a bank that are operated by the employees of a company or organization

Answer 19

credit union

Question 20

a business that is listed on a stock exchange and is accountable to the public

Answer 20

public business

Question 21

a business that does not have shares traded on the stock market

Answer 21

private business

Question 22

fair value principle

Answer 22

uses the current fair market value of the assets for the financial reports.

Question 23

a form in which changes caused by transactions are recorded

Answer 23

account

Question 24

the left side of the account

Answer 24

debit

Question 25

the right side of the account

Answer 25

credit

Question 26

a group of accountants that may be in the form of a book containing pages for each account in a manual accounting system

Answer 26

ledger

Question 27

requires that equal debit amounts and equal credit amounts be recorded for each transaction

Answer 27

double entry accounting

Question 28

a list of the ledger account balances. The total of the debit balances should equal the total of the credit balances

Answer 28

trial balance

Question 29

increase in owners equity resulting from the successful operation of a business

Answer 29

profit

Question 30

amounts earned by the business from the sale of goods services during routine operations

Answer 30

revenue

Question 31

the difference between revenue and expenses when revenue is greater than expenses.

Answer 31

net income

Question 32

income statement

Answer 32

a formal financial statment that summarizes revenue and expenses to determine the net income or net loss for a stated period of time

Question 33

time period principle

Answer 33

requires the definition and consistent use of the same accounting period

Question 34

matching principle

Answer 34

expenses for an accounting period must be matched with the revenue generated during the same period to derive an accurate net income.

Question 35

accural basis of accounting

Answer 35

the system under which revenue is recorded when earned and expenses are recorded once incurred.

Question 36

revenue recognition principle

Answer 36

revenue is recognized at the time the revnue is definitely earned

Question 37

cash basis of accounting

Answer 37

a method where you record transactions when cash is paid or recieved

Question 38

an equity account used to record the withdrawal of assets by an owner

Answer 38

drawings

Question 39

work sheet

Answer 39

an accounting document used to prepare financial statements

Question 40

sales invoice

Answer 40

sale on account to a customer

Question 41

bank debit memo

Answer 41

deduction from a companys bank account

Question 42

blank credit memo

Answer 42

ncrease in the companys bank account

Question 43

cheque issued

Answer 43

payment made to a creditor ( accounts payable ) or cash purchase

Question 44

cheque recieved

Answer 44

payment recieved from a customer ( account

Question 45

what number is assets

Answer 45

100-199

Question 46

what number is revenue

Answer 46

400-499

Question 47

what number is liabilities

Answer 47

200-299

Question 48

what number is owners equity

Answer 48

300-399

Question 49

what is journalizing

Answer 49

the process of recording transactions in a journal

Question 50

chronological recording of all parts of a transaction in one place

Answer 50

journal

Question 51

a transfer of information from a journal to the general ledger

Answer 51

posting

Question 52

records the assets liabilities and owners equity in a journal when a business first begins operations

Answer 52

opening entry

Question 53

a list of the names and account numbers of all of the accounts in a ledger

Answer 53

chart of accounts

Question 54

what is a transposition error

Answer 54

an error that is caused by substituting two ( possibly more) digits. Example being meaning to write 45 but writing 54

Question 55

three forms trial balances can take

Answer 55

-formal trial balance - list form - machine tape form

Question 56

compound entry

Answer 56

when multiple transactions are recorded in a single journal entry.

Question 57

balance column ledger account

Answer 57

a type of accounting record that includes multiple comlumns to track the balance of different accounts

Question 58

principle of objectivity

Answer 58

the principle of objectivity states that financial information should be recorded and reported based on verifiable evidence and facts , without bias or personal opinions