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IAP Bookkeeper Week One Exam Questions and Answers
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IAP Bookkeeper Week One Exam Questions and Answers
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IAP Bookkeeper Week One ExamQuestions and Answers
Asset Account - Answer -Represents valuable resources owned by the company
What categories are asset accounts split into? - Answer -Current and Future (Long-
Term)
Liability Accounts - Answer -Represents what a company owes or how the company is
financed
Examples of Assets - Answer -cash, accounts receivable, supplies, inventory
Examples of Liabilities - Answer -loans, employee wages, accounts payable
Equity Accounts - Answer -Keeps track of money invested into the business
Examples of Equity Accounts - Answer -common stock, dividends, revenues, expenses
Revenue Accounts - Answer -Tracks income of the business
examples of revenue accounts - Answer -Sales, service fees, rent, and interest revenue
Expense Account - Answer -Records resources used to generate income
Examples of Expense Accounts - Answer -cost of goods sold, depreciation, interest,
rent, salaries and wages, taxes
Accrual Method - Answer -transactions are recorded when the order is placed, the item
is delivered, or the service is provided, regardless of when the money is actually
received or paid
Cash Method - Answer -transactions are recorded when money changes hands
debt-to-income ratio - Answer -Divides liabilities by equity
What does a high debt to income ratio mean? - Answer -The business has more debt
and uses money that is borrowed to fund their business
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