Accounting Concepts and Principles

<p>For every debit in one account, there is a corresponding credit in another account (B)</p> Signup and view all the answers

<p>Journalizing, Posting to ledger, Trial balance, Final accounts (D)</p> Signup and view all the answers

<p>Corresponding with customers and creditors (C)</p> Signup and view all the answers

<p>Commission payable, Insurance receivable, Capital (C)</p> Signup and view all the answers

<p>Rent revenue (A)</p> Signup and view all the answers

<p>Returns Inward Book (A)</p> Signup and view all the answers

<p>$100 more was received than paid out in the period. (D)</p> Signup and view all the answers

<p>All assets are on the debit side, and all liabilities are on the credit side. (A)</p> Signup and view all the answers

<p>Increases both assets and liabilities. (C)</p> Signup and view all the answers

<p>Debit the bank account with $25. (B)</p> Signup and view all the answers

<p>Business Entity (A)</p> Signup and view all the answers

<p>Prudence (C)</p> Signup and view all the answers

<p>The separate entity concept only suggests the business be treated as a separate individual, but not that there are no personal accounts. This means D &amp; K are not breaching the concept. (D)</p> Signup and view all the answers

<p>Matching (B)</p> Signup and view all the answers

<p>$450 (A)</p> Signup and view all the answers

<p>Capital = Assets + Liabilities (A)</p> Signup and view all the answers

<p>Because they assist the company to earn income, but are not consumed in the process (C)</p> Signup and view all the answers

<p>$4480 (C)</p> Signup and view all the answers

<p>Cash on hand, inventory, accounts receivable (D)</p> Signup and view all the answers

<p>Accruals (B)</p> Signup and view all the answers

<p>To identify errors in journalizing and posting. (C)</p> Signup and view all the answers

<p>The business is assumed to be operating in the foreseeable future, and not planning for dissolution in the near future. (A)</p> Signup and view all the answers

<p>Ensuring that all expenses are matched to the revenue earnt, regardless of whether the expense was paid for or not. (A)</p> Signup and view all the answers

<p>Business Entity (B)</p> Signup and view all the answers

<p>Recording all expected losses and potential expenses, but not necessarily recording any potential profit or gains. (B)</p> Signup and view all the answers

<p>Inventory, cash at bank, accounts receivables, cash in hand (C)</p> Signup and view all the answers

<p>$1,000 (A)</p> Signup and view all the answers

<p>$25,500 (D)</p> Signup and view all the answers

<p>Increased drawings lead to decreased owner's equity. (C)</p> Signup and view all the answers

<p>To show the financial position of a business at a specific point in time. (C)</p> Signup and view all the answers

<p>Profit and Loss Account (A)</p> Signup and view all the answers

<p>Sales minus cost of goods sold. (B)</p> Signup and view all the answers

<p>Purchases plus or minus the difference between opening and closing stock. (A)</p> Signup and view all the answers

<p>$220 (B)</p> Signup and view all the answers

<p>Trading Account (C)</p> Signup and view all the answers

<p>Recording cash receipts and cash payments. (A)</p> Signup and view all the answers

<p>$1,995 (C)</p> Signup and view all the answers

<p>Contra entry (A)</p> Signup and view all the answers

<p>Bank Reconciliation Statement (A)</p> Signup and view all the answers

<p>Added to the cash book balance to agree with the bank statement. (A)</p> Signup and view all the answers

<p>A bank transfer was not entered in the cash book and a bank deposit was not shown on the bank statement. (C)</p> Signup and view all the answers

<p>$530 (B)</p> Signup and view all the answers

<p>Used for small cash/cheque payments. (A)</p> Signup and view all the answers

<p>Buying postage stamps. (D)</p> Signup and view all the answers

<p>$146 (C)</p> Signup and view all the answers

<p>Using the books of original entry to record items in the correct account. (A)</p> Signup and view all the answers

<p>Cash Book (A)</p> Signup and view all the answers

<p>Debit: Bank Account; Credit: Capital Account. (D)</p> Signup and view all the answers

The process of putting records in their analysis form.

Includes analyzing, interpreting, posting, and recording financial data.

For every debit, there is a corresponding credit in different accounts.

The correct order is journalizing, posting to ledger, trial balance, final account.

An event involving financial exchange, not physical wear or communication.

Accounts like commission payable, insurance receivable, and capital.

Accounts that represent assets and do not close at year-end, like land and building.

Include accounts receivable and accounts payable; wages and drawings are not.

Credit notes for returned goods are first recorded in the returns inward book.

A debit balance of $100 means the firm has overspent by $100.

All assets are recorded on the debit side and all liabilities on the credit side.

Purchasing equipment on credit increases both assets and liabilities.

An increase in bad debts decreases a sole trader's net profit.

Calculated from known working capital and current assets.

The remaining capital after withdrawals and debts are accounted for.

The difference between sales and the cost of goods sold.

Expenses directly tied to the production of goods sold.

A financial statement showing assets, liabilities, and capital at a specific time.

A record of all cash inflows and outflows, including cash receipts and payments.

A document that matches the cash balance on the books to the bank statement.

A ledger for small cash transactions within a business.

Money taken from a business by its owner for personal use.

Records reductions in amounts payable due to early payment or promotions.

Amount reimbursed to maintain a predetermined cash float in petty cash.

Customers who owe money to the business for goods or services provided.

The total amount available in the bank account according to bank records.

A record in an accounting system to capture financial transactions.

The difference between current assets and current liabilities, indicating liquidity.

Only transactions measurable in monetary terms are recorded.

The business is treated separately from its owners.

Expenses and losses are recognized as soon as they are anticipated.

Expenses must be matched with revenues they help to generate.

An estimated reserve for potential bad debts.

Revenue and expenses are recorded when they are earned or incurred, not when cash is exchanged.

The residual interest in the assets of the entity after deducting liabilities.

The collective process of identifying, analyzing, and recording financial transactions.

Assets = Liabilities + Owner's Equity.

Assets expected to be converted into cash or used within a year.

Long-term tangible assets used in the operations of a business.