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Basic Accounting: Business Transactions
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Basic Accounting: Business Transactions

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Questions and Answers

What does the debit aspect represent in a business transaction?

  • Exchange
  • Give
  • Support
  • Take (correct)
  • What is the primary evidence in support of a business transaction called?

  • Cash memo
  • Voucher (correct)
  • Invoice
  • Receipt
  • What is the purpose of a source document or voucher?

  • To maintain chronological order
  • To record the accounting transaction
  • To provide evidence of the transactions (correct)
  • To support petty expenses
  • What is the basis for entries in the books of accounts?

    <p>Voucher</p> Signup and view all the answers

    Who prepares and countersigns the accounting vouchers?

    <p>Both accountant and authorised person</p> Signup and view all the answers

    What are the documents like bills, cash memos, and receipts termed as in accounting?

    <p>Source documents</p> Signup and view all the answers

    Which term is used for activities in cash terms in business transactions?

    <p>Cash transactions</p> Signup and view all the answers

    What is the term used for the effect of business transactions on the accounting equation?

    <p>Equation effect</p> Signup and view all the answers

    What does the accounting process begin with?

    <p>Origin of business transactions</p> Signup and view all the answers

    What is the term used for the basis on which accounting is done?

    <p>Accounting basis</p> Signup and view all the answers

    What is the primary purpose of using vouchers in accounting?

    <p>To provide evidence of business transactions</p> Signup and view all the answers

    In accounting, what is the term used for activities that involve cash at the time of making transactions?

    <p>Cash transactions</p> Signup and view all the answers

    What is the effect of business transactions on the accounting equation?

    <p>It increases both assets and liabilities equally</p> Signup and view all the answers

    What is the basis for entries in the books of accounts?

    <p>Business transactions</p> Signup and view all the answers

    What is the term used for the origin of business transactions in the accounting process?

    <p>Source documents</p> Signup and view all the answers

    What does the debit aspect represent in a business transaction?

    <p>Give aspect</p> Signup and view all the answers

    What is the primary evidence in support of a business transaction called?

    <p>Accounting voucher</p> Signup and view all the answers

    What term is used for the written documents containing the analysis of business transactions for accounting and recording purposes?

    <p>Transaction Voucher</p> Signup and view all the answers

    What is the basis for entries in the books of accounts?

    <p>Accounting voucher</p> Signup and view all the answers

    In a business transaction, what represents the Take aspect?

    <p>Credit aspect</p> Signup and view all the answers

    Study Notes

    Business Transactions and Accounting Basics

    • The debit aspect in a business transaction represents the receiving side or the value added to an asset or expense account.
    • The primary evidence supporting a business transaction is known as a source document.
    • Source documents or vouchers serve to document the details of the transaction and provide proof and reference for accounting entries.
    • Entries in the books of accounts are based on evidence from source documents like invoices, receipts, and contracts.
    • Accounting vouchers are prepared by the accounting department and must be countersigned by authorized personnel to validate the transaction.
    • Documents such as bills, cash memos, and receipts are collectively referred to as source documents in accounting.

    Cash Transactions and Accounting Equation

    • The term used for cash-related activities in business transactions is cash transactions.
    • The impact of business transactions on the accounting equation is represented through changes in assets, liabilities, and equity, illustrating the relationship between them.
    • The accounting process begins with identifying and recording transactions through source documents.

    Accounting Principles and Vouchers

    • The foundation upon which accounting is conducted is known as the accounting basis or accounting principles.
    • The primary purpose of using vouchers in accounting is to ensure proper documentation, authorization, and tracking of financial transactions.
    • Activities involving cash at the time of transactions are termed cash transactions, emphasizing the immediate financial impact.

    Additional Notes

    • The origin of business transactions in the accounting process is documented through source documents, critical for accurate record-keeping.
    • The effect of business transactions on the accounting equation can be summarized as the changes in the financial position of a business, balancing the equation through debits and credits.

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    Description

    Test your knowledge on accounting for business transactions including selling goods, collecting payments, making payments, and other related activities. Understand how these transactions are recorded and classified in accounting.

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