Exam (elaborations)
Bookkeeping Basics Exam Questions and Answers
- Course
- Institution
Bookkeeping Basics Exam Questions and Answers
[Show more]
Content preview
Bookkeeping Basics Exam Questionsand Answers
Accounting Principle #1
Economic Entity Assumption* - Answer -The business and its financial transactions are
separate from the owner's personal financial transactions.
Accounting Principle #4
Cost Principle - Answer -1) Financial transactions are shown, forever, as the original
and historical cost.
2) We do NOT adjust for inflation or the increase or decrease in the value of an item.
Accounting Principle #7
Matching Principle* - Answer -1) forces us to use the accrual basis of accounting.
2) Expenses are matched with revenue (ex: cost of a product is shown when sold--sales
commission is reflected in the period the sale is recorded).
Accounting Principle #8
Revenue Recognition Principle - Answer -1) Revenue/sales/income is shown in the
financial statement when a service is performed or a good is sold.
2) It doesn't matter when cash is actually received for the service performed or the good
sold.
Accounting Principle #10
Conservatism Principle* - Answer -When faced with a choice on financial statements,
choose the option that reflects: 1) decrease in net income, and/or 2) decrease in
assets/equity, and/or increase in liabilities.
Order of Accounts in
Chart of Accounts - Answer -Assets
Liabilities
Equity
Revenue
Expenses
Trial Balance - Answer -two-column summary of all debits and credits in the Chart of
Accounts
1) Is shown at end of an accounting period
2) Lists all the accounts in numerical order with assets first and expenses last
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller millyphilip. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
66579 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now