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Bookkeeping Ch 1-6 questions with complete solutions graded A+
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Bookkeeping Ch 1-6 questions with complete solutions graded A+
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Bookkeeping Ch 1-6Bookkeeping - correct answer ✔✔the activity of recording business transactions
Double-entry bookkeeping - correct answer ✔✔a system of recording and classifying business
transactions that maintains the balance of the accounting equation
General ledger - correct answer ✔✔the ledger that contains all of the financial accounts of a business
Cash receipts journal - correct answer ✔✔a special journal used to record ONLY cash receipt transactions
Cash disbursement journal - correct answer ✔✔is a chronological listing of all payments
SOMETIMES CALLED A CHECK REGISTER AND IS SIMILAR TO THE RECORD KEPT FOR A PERSONAL
CHECKING ACCOUNT.
Bookkeeping - correct answer ✔✔Bookkeeping, the methodical way in which business tracts their
transactions, is rooted in accounting.
-Accounting is the total structure of records and procedures used to record, classify, and report
information about a business's financial transactions.
- Bookkeeping involves the recording of the financial information into the accounting system while
maintaining adherence to solid accounting principles.
Balance sheet - correct answer ✔✔Balance sheet: The financial statement that presents a snapshot of
the company's financial position (assets, liabilities, and equity) as of a particular date in time. - It's called
a balance sheet because the things owned by the company (assets) must equal the claims against those
assets (liabilities and equity)
Assets - correct answer ✔✔All things a company owns in order to successfully run its business, such as
cash, buildings, land, tools, equipment, vehicles, and furniture.
, Liabilities - correct answer ✔✔All the debts the company owes, such as bonds, loans, and unpaid bills.
Equity - correct answer ✔✔All the money invested in the company by its owners. In a small business
owned by one person or a group of people, the owners' equity is shown in a Capital account.
Retained earnings - correct answer ✔✔the accumulated earnings from a firm's profitable operations
that were reinvested in the business and not paid out to stockholders in dividends
Drawing account - correct answer ✔✔a temporary owner's equity account that is used when an owner
withdraws cash or other assets from the business for personal use.
Income statement - correct answer ✔✔The financial statement that presents a summary of the
company's financial activity over a certain period of time, such a a month, quarter, or year. The
statement starts with Revenue earned, subtracts out the Cost of Goods Sold (COGS) and the Expenses,
and ends withe the bottom line - Net Profit or Loss.
Revenue - correct answer ✔✔Revenue: All money collected in the process of selling hte company's
goods and services. Some companies also collect revenue through other means, such as selling assets
the business no longer needs or earning interest by offering short-term loans to employees or other
businesses.
Cost of Goods Sold - correct answer ✔✔COGS: All money spent to purchase or make the products or
services the company plans to sell to its customers.
Expenses - correct answer ✔✔Expenses: All money spent to operate the company that's not directly
related to the sale of individual goods or services.
Accounting period - correct answer ✔✔a period that is typically one year; however, it can be any length
of time for which accounting records are maintained, often for a month.
Accounts Receivable: - correct answer ✔✔Accounts Receivable: The account used to track all customer
sales that are made by store credit. Store credit refers not to credit card sales but rather to sales in which
the customer is given credit directly by the store and the store needs to collect payment from the
customer at a later date.
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