Exam (elaborations)
Bookkeeping basics Exam Questions and Answers 2024
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Bookkeeping basics Exam
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Bookkeeping basics ExamWhat does a bookkeeper typically do? - answer Bookkeepers have many
responsibilities which include, record financial transactions, reconcile bank accounts
and manage bank feeds, manage accounts receivable, work with tax preparers and
assist with tax compliance, and generate financial statements.
Honesty - answerAs a bookkeeper, you must always act with integrity and honesty. This
means:
Reporting financial data in accurate and timely manner.
Owning any mistakes and doing everything you can to fix them
Being open and transparent with your client about the state of their finances.
Objectivity - answerBecause accurate financial records are vital to the success of any
business, clients rely on their bookkeeper to act objectively at all times. This means:
Never taking a job that might pose a conflict of interest
Never allowing another party to influence your findings
Never letting personal bias get in the way of performing your duties.
Confidentiality - answerClients entrust bookkeepers with very sensitive financial
information, and a business owner must be able to trust that their bookkeeper will treat
their data with the utmost care. This means:
Never discussing anything relating to a client outside of the job.
Never using inside information of a client for personal gain.
For more info visit: www.icbusa.org
Professionalism - answerAny business owner will expect their bookkeeper to act
professionally at all times. This means:
Being courteous and considerate of the business owner's needs
Avoiding any activity, personal or professional, that could bring shame to the profession
or business.
Assets - answerAssets are what the company owns or controls and expects to gain
benefit from. The simplest example is cash.
Liability - answerLiability are what the company owes to others.
Equity - answerEquity is the owner's stake in the company. It's how much they've
invested or withdrawn.
Double-entry accounting - answera way of bookkeeping that tracks which accounts
increase and which decrease for a given transaction. Increases and decreases are
, recorded in a debit and credit columns and the total debits and total credits for a
transaction have to be balanced.
5 account types - answerassets, liability, equity, revenue and expenses
Assets+Expenses= Liabilities + Equity + Revenue
DEA/LER
To increase an account you will DEBIT an Expense or Asset
but CREDIT a Liability, Equity or, Revenue account
How would you record a $100 cash payment to the tractor supply store?
A) Debit Cash to increase the account
B) Debit Cash to decrease the account
C) Credit Cash to increase the account
D) Credit Cash to decrease the account - answerD) Credit Cash to decrease the
account
We record this as a credit because it is decreasing an asset account (in this case, cash)
Question 1
Which two entries would need to be recorded to log Lou receiving a $100 payment for a
weeding job he completed for Ms. Rosa?
Date July 10
Description Debit Credit
Ms. Rosa
Cash
Lawncare Revenue
A) $100 Credit in Cash
B) $100 Credit in Lawncare Revenue
Correct
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