Accounting v. Bookkeeping,
Bookkeeping Transactions, bookkeeping
(Accounting Foundations on LinkedIn
Learning), Lesson 3 - Introduction to
Bookkeeping, Bookkeeping Basics
Accounting - correct answer ✔The recording, measurement and
interpretation of financial information
Bookkeeping - correct answer ✔Typically limited to the routine, day-to-day
recording of business transactions
Difference between accounting and bookkeeping - correct answer
✔Bookkeeping is responsible for obtaining and recording the information that
accountants require to analyze a firm's financial position
required credentials in public accounting - correct answer ✔Work with a
range of clients to prepare financials documents that an individual or
corporation is required to disclose to the public
Responsible for checking the accuracy of corporate and personal records in
order to prepare tax filings
Public companies must follow the principles and rules set out in the IFRS
,required credentials in private accounting - correct answer ✔Deal with the
financial information of the specific company they work for - preparing or
analyzing reports for an internal manager
Private companies - must choose to follow either IFRS or ASPE
Assets - correct answer ✔Firm's economic resources, or items of value that it
owns
Liabilities - correct answer ✔Debts that a firm owes to others
Owners equity - correct answer ✔Equals assets minus liabilities and reflects
historical values
To make required reporting comparable across international jurisdictions
Creditors - correct answer ✔A person or company to whom money is owed
Stakeholders - correct answer ✔Groups that have a stake in the success
and outcomes of a business
Bookkeeping Transactions
What are the 5 steps in the accounting system? - correct answer ✔Business
transaction, Business document, Books of prime entry, Ledger accounts &
Trial balance
, What are the 6 business documents? - correct answer ✔Purchase order,
sales order, delivery note, goods received note, sales invoice, credit note
What is VAT? - correct answer ✔A consumption tax added to a product
selling price representing the value added to the product at each stage of
production and supply.
What is output tax? - correct answer ✔Tax charged on the sale of goods and
services
What is Input tax? - correct answer ✔Tax charged on the purchase of goods
and services
What are the three tax rates? - correct answer ✔Zero-rates, 5% & 20%
What is non-deductible VAT? - correct answer ✔VAT on the purchase of any
of these items can never be deducted from the amount of tax payable to
HMRC. The business has to bear the VAT as an expense. Examples include
motor cars and business entertaining.
What are the three types of discount? - correct answer ✔Trade, bulk and
PPD
What is a trade discount? - correct answer ✔A definite amount deducted
from the list price of the goods to encourage rewarding customer loyalty.
What is a bulk discount? - correct answer ✔A definite amount deducted from
the list price of the goods when a sales order is over a certain quantity.
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