Unit 1.0 Fundamentals Of Accounting And Bookkeepin
Unit 1.0 Fundamentals of Accounting and Bookkeepin
Exam (elaborations)
Unit 1.0 Fundamentals of Accounting and Bookkeeping Questions and Correct Answers
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Course
Unit 1.0 Fundamentals of Accounting and Bookkeepin
Institution
Unit 1.0 Fundamentals Of Accounting And Bookkeepin
Unit 1.0 Fundamentals of Accounting and Bookkeeping
Proprietorship / Sole Prop - Answer- A business owned by one person. Simplest structure and not separate from its owner for legal purposes
Partnership - Answer- Business owned by two or more persons, the owners are called partners. Not a sep...
Unit 1.0 Fundamentals of Accounting
and Bookkeeping
Proprietorship / Sole Prop - Answer- A business owned by one person. Simplest
structure and not separate from its owner for legal purposes
Partnership - Answer- Business owned by two or more persons, the owners are
called partners. Not a separate legal entity. Profit/Loss "Pass through" to owners.
Corporation - Answer- Business organized as a separate legal entity
Limited Liability Company "LLC" - Answer- Separate Business and legal entity, but
choice of how it is taxed. LLCs are fairly new structures.
10 Steps of Accounting Cycle - Answer- 1) Business transaction occur and source
documents are created
2) Analyze business transactions
3) record/Journalize the business transactions in the journals
4) Post the journals to general ledger accounts
5) Prepare a trial balance
6) Analyze the accounts, journalize and post adjusting entries
7) Prepare an adjusted trial balance
8) Prepare Financial Statemements
9) Journalize and post closing entries
10) Prepare a post-closing trial balance
Accounting Transaction - Answer- Business event that has a monetary impact, such
as selling goods to a customer or buying supplies from a vendor.
Cash Account (definition) - Answer- Current balance of cash held by a business,
usually in checking or savings accounts. ASSET / Debit balance
Accounts Receivable (definition) - Answer- Sales on credit, which customers must
pay for at a later date. ASSET / Debit balance
Inventory (definition) - Answer- This is items held in stock, for eventual sale to
customers. ASSET / Debit balance
Fixed Assets (definition) - Answer- More expensive assets that the business plans to
use for multiple years. ASSET / Debit balance
Accounts Payable (definition) - Answer- Liabilities payable to suppliers that have not
yet been paid. LIABILITY / Credit balance
Debt (definition) - Answer- Cash loaned to the business by another party
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