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Bookkeeping Basics questions with 100% correct answers
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Bookkeeping Basics questions with 100% correct answers
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Bookkeeping BasicsWhat is the difference between accounting and bookkeeping? - correct answer ✔✔A bookkeeper's job is
to record transactions in the books of an entity. An accountant's job is to use the information given by
bookkeepers to prepare financial statements.
What is double-entry bookkeeping? and why is it used? - correct answer ✔✔Double-entry bookkeeping
is a bookkeeping system that records each transaction twice. This is by displaying a positive and negative
financial effect. This means that positives should equal negatives in the end making it far easier to
identify any errors.
What is a ledger? - correct answer ✔✔A ledger (usually referred to as the general or nominal ledger) is a
book or computer system that contains a number of accounts, each having a 'debit' and a 'credit' side,
which are used to record each transaction.
Why is it important for an accountant to understand bookkeeping? - correct answer ✔✔The accounts in
the ledger are used to create the financial statements. The bookkeeping system gives a more detailed
overview of how the figures on the financial statements are made. The accountant will need to look at
and understand the books in order to check for and most likely make adjustments.
What is the 'dual aspect concept'? - correct answer ✔✔The dual aspect concept is that each transaction
has 2 effects, as a transaction means that there is a loss from somewhere (one account) in order for
there to be a gain elsewhere (another account). Double-entry bookkeeping uses this concept by
recording the movement of the transaction.
What determines whether an account should be debited or credited in a transaction? - correct answer
✔✔The account credited is the account where the money comes from. The account that money goes to
is then debited.
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