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BASIC BOOKKEEPING - CHAPTER 1 - AN INTRODUCTION TO BOOKKEEPING QUESTIONS WITH SOLUTIONS
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BASIC BOOKKEEPING - CHAPTER 1 - AN INTRODUCTION TO BOOKKEEPING
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BASIC BOOKKEEPING - CHAPTER 1 -AN INTRODUCTION TO BOOKKEEPING
OBJECTIVES - answer1. Define the three forms of business organization;
2. Define the five categories of accounts: assets, liabilities, owner's equity, revenues,
and expenses;
3. Classify accounts according to the five categories;
4. Identify the generally accepted accounting principles GAAP.
ASSETS - answer Things of value, owned by the business.
E.g. Cash, buildings, equipment, mapper handles for sale.
BALANCE SHEET - answer Statement f assets, liabilities and owner's equity.
BOOKKEEPING – answer Os what you do when you keep track of your own financial
activities in a personal chequing account.
It is your record of the money you received and money you spent.
CORPORATION - answer A business that operates under a government charter.
Owners are called shareholders or stockholders.
EXPENSES - answer Costs of operating the business,
E.g. Rent, salaries, electricity, water, advertising, etc.
GAAAP - answerGenerally Accepted Accounting Principles.
All accountants follow the same procedures, the same rules, in how they record
accounting activities and report accounting information.
INCOME STATEMENT,
Financial statement. - answerShows the revenue, income, earned the operating costs
incurred. Net income is the difference between revenue and costs.
LIABILITIES - answerDebts owing to others,
E,g, credit cards, bank loans and mortgages.
OWNER'S EQUITY - answerThe value of assets that remains after all debts have been
paid off.
PARTNERSHIP - answerA business owned by two or more persons called partners.
The partners share the management and decision-making.
Each partner is responsible for the debts of the business.
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