Week 1

Question 1

5 Building Blocks of Accounting

Answer 1

Assets, Liabilities, Income, Capital, Expenses

Question 2

Revenue - Income = ????

Answer 2

Profit

Question 3

What’s another way of saying Daily Activity

Answer 3

Expenses

Question 4

What is Equity

Answer 4

Whatever is left over after Assets - Liabilities

Question 5

Assets - Liabilities = ????

Answer 5

Equity

Question 6

What does Limited Liability mean

Answer 6

Means owners are only responsible for business debts up to what they invested, protecting their personal assets

Question 7

What does Limited Liability allow

Answer 7

A lower Equity (e.g. more money in loans) as if something goes wrong with the company, the owners are protected

Question 8

What are Business to Business Transactions

Answer 8

A flexible payment that allows Business’s to pay after receiving a product or service

Question 9

What do Balance Sheets Show

Answer 9

Assets, Liabilities and Owners Equity

Question 10

What does Accrual Accounting mean

Answer 10

Incomes and Expenses are recorded when they are earned or incurred, not just when cash is received or paid.

Question 11

What does RE mean

Answer 11

Retained Earnings

Question 12

What are Retained Earnings

Answer 12

Money held from previous periods

Question 13

Who are Dividends paid to

Answer 13

Shareholders (Owners)