Intuit Academy Bookkeeping Professional Certificate: Bookkeeping Basics Exam Study Guide Questions All Answered
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Course
BOOKKEEPING PROFESSIONAL
Institution
BOOKKEEPING PROFESSIONAL
Materiality Principle - An accounting standard can be ignored if the impact
on financial statements is small and not misleading
Consistency Principle - A business will adopt an accounting method and use the
same method for similar items in the future. Methods are only changed if it improves
rep...
Intuit Academy Bookkeeping Professional
Certificate: Bookkeeping Basics Exam
Study Guide Questions All Answered
Materiality Principle - ✔An accounting standard can be ignored if the impact
on financial statements is small and not misleading
Consistency Principle - ✔A business will adopt an accounting method and use the
same method for similar items in the future. Methods are only changed if it improves
reporting.
Monetary Unit Assumption - ✔One currency is used throughout all
accounting activities. Inflation is not accounted for.
Going Concern Assumption - ✔When a company is no longer a going concern it
must report the issues it's having including ongoing losses, credit denial and lawsuits.
Going Concern - ✔A company is stable and can meet it's obligations for
the foreseeable future.
Periodicity Assumption - ✔You can report a companies financials in smaller chunks
of time
Revenue Recognition Principle - ✔Revenue is earned when a service is performed
even if cash is not yet received. Revenue must be recognized in the period when
realized and earned, not necessarily when payment is received.
, Matching Principle - ✔revenue earned should be matched with the expenses
incurred in earning that revenue and in the same period
Cash Basis Accounting - ✔Revenue is recognized when revenue is received
and expenses are recognized when payed out
Accrual Basis Accounting - ✔revenue is reported when earned and expenses
are reported when incurred.
Hybrid Accounting Method - ✔A combination of cash basis and accrual
basis accounting.
The Accounting Principle - ✔You can't mix business and personal assets or expenses.
The Five Account Types - ✔Assets, Liabilities, Equity, Revenue, Expenses
Normal balance of the five account types - ✔Assets- Normal Dr balance
Expenses- Normal Dr balance
Dividends- Normal Dr balance
Equity- Normal Cr balance
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