Bookkeeping Basics Part 10 UPDATED Exam Questions and CORRECT Answers
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Course
Bookkeeping
Institution
Bookkeeping
Bookkeeping Basics Part 10 UPDATED
Exam Questions and CORRECT Answers
Anything a business owns of value, or a resource of value, that has the potential to be
transformed into cash. - CORRECT ANSWER - Asset
The list of all of the accounts and sub-accounts used to categorize transactions. - COR...
Bookkeeping Basics Part 10 UPDATED
Exam Questions and CORRECT Answers
Anything a business owns of value, or a resource of value, that has the potential to be
transformed into cash. - CORRECT ANSWER - Asset
The list of all of the accounts and sub-accounts used to categorize transactions. - CORRECT
ANSWER - Chart of accounts
The report covering the sources and uses of cash by a business. - CORRECT ANSWER -
Statement of cashflows
The financial statement that reports a business's assets, liabilities, and equity at a specific point in
time. - CORRECT ANSWER - Balance sheet
When Craig, the owner of a landscaping business, buys equipment, the purchase appears as a
debit on his business's balance sheet. What does this mean? - CORRECT ANSWER -A
debit is an increase in assets or expenses or a decrease in liabilities, owner's equity or revenue.
When Craig sells mulch, the sales revenue appears as credit on his business's books. What does
this mean? - CORRECT ANSWER - A credit is a decrease in assets or expenses or an
increase in liabilities, owner's equity or revenue.
Craig considers the investment in the business he owns as equity. What does this mean? -
CORRECT ANSWER - Equity is an owner's stake in the company, how much the owner
has invested into the business or withdrawn from the business over time.
Income earned through business, gross proceeds or sales. - CORRECT ANSWER -
Revenue
Costs associated with the action of running a business. - CORRECT ANSWER - Expenses
, Money a business owes to others. - CORRECT ANSWER - Liability
The report that shows a business's revenues and expenses during a particular period. -
CORRECT ANSWER - Income statement
Other than the transaction journal, what is another place that we can view the individual
transactions that
Craig has made? - CORRECT ANSWER - General ledger
Which section will the credit card transaction be shown
on the balance sheet? - CORRECT ANSWER - Total liabilities
Which section includes the account for the credit card purchases for the period? - CORRECT
ANSWER - Which section includes the account for the credit card purchases for the
period?
Which type of account is accounts receivable? - CORRECT ANSWER - Assets
You're the owner of a small landscaping business that provides lawn care services to residential
customers. You charge $100 per service, and you usually get paid at the end of each month. In
June, you provided 1 service each to 10 different customers, but only 8 of them paid you by June
30. The other 2 customers paid you on July 5. - CORRECT ANSWER - Under accrual
accounting, revenue is recognized when it is earned, regardless of when cash is received.
Therefore, you would report $1,000 as revenue for June since you provided 10 services at $100
each. Under cash-basis accounting, revenue is recognized only when cash is received.
Therefore, you would report only $800 as revenue for June since you received payment from 8
customers at $100 each. The payment from the other 2 customers would be reported as revenue
in July under cash-basis accounting.
What is a credit in accounting? - CORRECT ANSWER - A decrease in assets or expenses
or an increase in liabilities, owner's equity or revenue.
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