Questions and Answers
Book-keeping is the process of recording financial transactions in the accounting ______ of an entity.
records
Double entry book-keeping is used to record dual aspect of transactions in systems designed to allow the management of the business to monitor its ______.
progress
Accounting is the process of recording, classifying, summarising the information of financial ______ and interpreting the results thereof.
nature
Financial accounting is a term that describes maintaining a system of accounting ______ for business transactions.
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Cost and Management Accounting involves the recording and communication of economic information to management for ______, control and decision making.
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A business usually has thousands of transactions in an accounting ______.
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The first place where transactions are recorded according to the type of transactions is called ______.
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Transactions totals are entered into the appropriate accounts in ______.
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A list of balances extracted from the ledgers is called a ______.
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The figures in trial balance are adjusted for period-end ______ before preparing financial statements.
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Study Notes
Book-Keeping
- Book-keeping involves recording financial transactions in an entity's accounting records, collectively referred to as 'the books'.
- Transactions are categorized into different types and recorded in individual accounts, each dedicated to a specific type of asset, liability, income, expense, or owner's capital.
- Double entry book-keeping captures the dual aspects of transactions, enabling effective management monitoring and periodic financial reporting.
Accounting
- Accounting encompasses recording, classifying, summarizing, and interpreting financial information.
- Distinction exists between two types of accounting: financial accounting and managerial accounting.
- Financial accounting includes maintaining records of business transactions and reporting financial performance through formal financial statements to stakeholders.
- Cost and Management Accounting focuses on capturing and communicating economic data to aid management in planning, control, and decision-making.
Accounting Cycle
- Transactions are events impacting finances that must be documented; businesses often experience thousands within an accounting period.
- Books of prime entry serve as the initial section for transaction recording, organized by transaction type.
- Ledgers are used for entering transaction totals into corresponding accounts for proper tracking.
- A trial balance is generated by compiling balances from the ledgers, serving as a check before finalizing entries.
- Financial statements are produced from the trial balance after necessary adjustments at the end of the period, reflecting the financial status of the entity.
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Description
This quiz focuses on the principles of book-keeping and accounting, including the process of recording financial transactions. It covers different types of accounts used in double-entry book-keeping. Perfect for understanding the foundational concepts in accounting.
