Bookkeeping Final Exam review UPDATED ACTUAL Exam Questions and CORRECT Answers
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Course
Bookkeeping
Institution
Bookkeeping
Bookkeeping Final Exam review UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Balance Statement - CORRECT ANSWER - (Records)
This shows what you own
Assets + Liabilities
Owner's Equity is the difference between these two
Bookkeeping Final Exam review UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Balance Statement - CORRECT ANSWER - (Records)
This shows what you own
Assets + Liabilities
Owner's Equity is the difference between these two
Income Statement - CORRECT ANSWER - This shows the revenue (income) earned and
the operating cost incurred. Net Income is the difference between revenue & cost
Assets - CORRECT ANSWER - Things of value
Ex. cash, buildings, equipment, merchandise for sale
Increased with a debit and decreases with a credit
Liabilities - CORRECT ANSWER - Debts owing to others
Ex. Credit cards, bank loans, and mortgages
Increases with a credit & decreases with a debit
Owners Equity - CORRECT ANSWER - The value of assets that remains after all debts
have been paid off
Increases with a credit and decreases with a debit
Revenues - CORRECT ANSWER - Earnings from the sales of goods and services to
customers
A business can have more than one kind of revenue
Increases with a credit and decreases with a debit
, Expenses - CORRECT ANSWER - Cost of operating the business
Ex. Rent, Salaries, Electricity, Water, Advertising
Increases with a debit and decreases with a credit
Business Entity Concept - CORRECT ANSWER - All accounts must be kept separate
from personal expenses
Conservatism Principle - CORRECT ANSWER - Information must be fair and reasonable
Values must not be overstated or understated
The way an accountant can choose to report things with the business
Objectivity Principle - CORRECT ANSWER - Transactions must be based on objective
evidence
Each transaction must have a verifiable source document to prove when it happened, what it was
for, and how much (ex. receipts)
Time Period Principle - CORRECT ANSWER - Each transaction will relate to a specific
financial period (a specific month or a specific operating year)
Recognition Principle - CORRECT ANSWER - Revenue is recognized when it has been
earned, whether the money has been received or not
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