topic 4

Question 1

permanent accounts

Answer 1

accounts that carry across periods (assets, liabilities, capital)

Question 2

temporary accounts

Answer 2

• accounts that distinctly relate to one period (income, equity, drawings).
• closed (reset to 0 balances)

Question 3

trial balance title format

Answer 3

Business name …..
Trial Balance as at ……date eg 30 June 2025

Question 4

trial balance

Answer 4

• list of all ledger accounts in number order w/ their current balances.
• allows to check accuracy of recording.

Question 5

accruals

Answer 5

• Money that a business has earned or owes but hasn’t yet received or paid.
• Example: Wages earned by employees in December but paid in January.

Question 6

chart of accounts numbers for current and non current liabilities

Answer 6

• current liabilities: numbered in the low hundredths
• non-current liabilities: listed from 150 up

Question 7

chart of accounts

Answer 7

• ## A list of all ledger accounts and their respective numbers.

Question 8

process to generate financial reports:

Answer 8

• income and expenses used to generate income statement
• data from that is taken and capital and drawings is incorporated to get the statement of changes in equity.
• closing balance from that, along with liabilities and assets is used to create the balance sheet.

Question 9

income statement title format

Answer 9

business name….
INCOME STATEMENT for the period ending ..date eg 30 June 2025

Question 10

statement of changes in equity title format

Answer 10

business name ….
STATEMENT OF CHANGES IN EQUITY for the period ending …date eg 30 June 2025

Question 11

statement of changes in equity format

Answer 11

• capital at the start of the period
• additional capital
• Plus Profit
• Less Drawings
• capital at the end of the period

Question 12

balance sheet title format

Answer 12

business name ….
BALANCE SHEET as at …date eg 30 June 2025

Question 13

statement of cash flows title format

Answer 13

business name ….
STATEMENT OF CASH FLOWS for the period ending …date eg 30 June 2025

Question 14

statement of cash flows includes

Answer 14

• details of cash movements in and out of the business from the Cash ledger account.
• these details are classified into operating, investing, and financing activities.

Question 15

statement of cash flows format

Answer 15

• cash flows from operating activities
  net cash flow from operating
• cash flows from investing activities
  net cash flow from investing
• cash flows from financing activities
  net cash flow from financing
• net cash flow
  opening cash balance as at ?
  closing cash balance as at ?

Question 16

note about the ‘period ending’

Answer 16

write the actual period eg week, month, year

Question 17

statement of cash flows investing activities