POA STUDYING

Question 1

what is accounting

Answer 1

It’s the language of business.
its is the way that people communicate using accounting phares and documents.

Question 2

what is the formula for accounts

Answer 2

asset= capital+Liability
capital= asset- liability
liability= asset- capital

Question 3

what is an asset

Answer 3

an asset is anything value that is owed by an individual or a business.

Question 4

what are the 2 types of assets

Answer 4

fixed and currents asset

Question 5

what is a fixed asset

Answer 5

a fixed asset is to help the business run they are not bought for resale

Question 6

examples of fixed assets

Answer 6

land, building, furniture etc.

Question 7

what are current assets

Answer 7

they are the asset the business intends to convert into cash

Question 8

examples of current assents

Answer 8

inventory / stock, cash at bank, debtors

Question 9

what are current liability

Answer 9

short term debt that our firm must pay less than 12 months

Question 10

examples of current liability

Answer 10

creditors, bank over draft, accured

Question 11

what are long term liability

Answer 11

debts our firm must pay in 12 months

Question 12

example of long term liability

Answer 12

bank loans, mortgage

Question 13

what is capital

Answer 13

cash or other assets invested into a business.

Question 14

what is purchase account

Answer 14

it is use when our firm buys goods by cash, cheque or on credit

Question 15

what is sale account

Answer 15

it is use when our firm sells goods by cash, cheque or on credit

Question 16

what should happen to the purchase account

Answer 16

it must be debited and the other account credited.

Question 17

what should happen to the sales account

Answer 17

it must be credited and the other account must be debited

Question 18

what is return outwards account

Answer 18

it is when our firm returns goods to the supplier because the goods either been spoiled, damage

Question 19

what should happen to the returns outward account

Answer 19

must be entered on the credit side and the other account on the debit side

Question 20

what is return inwards account

Answer 20

it is when the customer has returned goods back to our firm either because the goods were damaged or spoiled.

Question 21

what should happen to the returns inward account

Answer 21

must be entered on the debit side and the other account credit side

Question 22

what is drawing account

Answer 22

when the proprietor removes money out of the business for her/his uses

Question 23

what is a revenue

Answer 23

these are sums of money received by our firm.

Question 24

examples of revenues

Answer 24

rent receivable, commisions receivable, bad debt recover,discount receivable

Question 25

what are expenses

Answer 25

bills are firm must pay

Question 26

what is a personal account

Answer 26

an account that is named after a person or a firm

Question 27

who are debtors

Answer 27

debtors are people who owe us sums of money

Question 28

who are creditors

Answer 28

creditor are people who we owe sums of money to

Question 29

how can you tell when some one is a debtor

Answer 29

by looking at a personal account and the b/d is on the debit side

Question 30

how can you tell when some one is a creditor

Answer 30

by looking at a personal account and the b/d is on the credit side

Question 31

what is a trial balance

Answer 31

It's a financel statment use to check arithmitcal accurcy of double entry records

Question 32

what is an income statement

Question 33

what is a balance sheet

Answer 33

financal statement that is use to show value at a spacific time and point

Question 34

what is carriage inwards

Answer 34

when our firm buys goods and have to pay for transportation for the goods to be delivered

Question 35

gross profit

Answer 35

this is profit before bills have been paid

Question 36

what is net profit

Answer 36

this is profit after all expenses have been paid

Question 37

what does ledgers contain

Answer 37

T.Accounts

Question 38

what does journals contain

Answer 38

list and expantory notes

Question 39

sale ledger

Answer 39

contains all the accounts of persons and firms that our business sells goods on credit

Question 40

purchase ledger

Answer 40

contain all the accounts of person and business that our firm purchases goods from on credit

Question 41

cash book

Answer 41

a special ledger that contains both cash and bank

Question 42

general ledger

Answer 42

contains all other accounts Like: purchase account, revenue account, etc