Bookkeeping Ch 1-6 Questions With Solutions 100% Correct
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Course
ASB BOOKKEEPING
Institution
ASB BOOKKEEPING
Bookkeeping Ch 1-6 Questions With Solutions
100% Correct
Bookkeeping the activity of recording business transactions
Double-entry bookkeeping a system of recording and classifying business transactions
that maintains the balance of the accounting equation
General ledger the ledger that conta...
Bookkeeping Ch 1-6 Questions With Solutions
100% Correct
Bookkeeping the activity of recording business transactions
Double-entry bookkeeping a system of recording and classifying business transactions
that maintains the balance of the accounting equation
General ledger the ledger that contains all of the financial accounts of a business
Cash receipts journal a special journal used to record ONLY cash receipt transactions
Cash disbursement journal 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 Bookkeeping, the methodical way in which business tracts their
transactions, is rooted in accounting.
, Bookkeeping Ch 1-6 Questions With Solutions
100% Correct
-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 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 All things a company owns in order to successfully run its business, such as cash,
buildings, land, tools, equipment, vehicles, and furniture.
Liabilities All the debts the company owes, such as bonds, loans, and unpaid bills.
Equity 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.
, Bookkeeping Ch 1-6 Questions With Solutions
100% Correct
Retained earnings 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 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 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 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 COGS: All money spent to purchase or make the products or services
the company plans to sell to its customers.
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