Accounting Basics Quiz

An account that represents a person or entity, such as a customer or supplier.

An account that reflects the value of assets, such as cash, inventory, or equipment.

An account that records income or expenses, such as sales revenue or rent expense.

The principle that a business is separate from its owner, meaning their assets and liabilities are distinct.

The process of recording, classifying, summarizing, and interpreting financial transactions.

The owner's investment in the business. It represents the initial funds contributed by the owner to start and operate the business.

Every transaction impacts at least two accounts: one account is increased (debited) and another is decreased (credited). This ensures the accounting equation (Assets = Liabilities + Equity) is balanced.

When a person receives something, their account is debited, and when they give something, their account is credited.

Salary is an expense for the business, as it's the cost of employing personnel. Expenses are always debited, as they reduce the business's profits.

Tally Groups are pre-defined categories for classifying accounts in Tally. They help organize and categorize the financial information, making it easier to analyze and report.