Introduction to Bookkeeping
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Questions and Answers

What is the primary purpose of bookkeeping?

  • Generating sales leads
  • Designing marketing campaigns
  • Managing human resources
  • Organizing business's financial transactions (correct)

    • How does bookkeeping differ from accounting?

  • Bookkeeping manages human resources, while accounting manages production processes
  • Bookkeeping involves marketing strategies, while accounting focuses on operations
  • Bookkeeping prioritizes customer service, while accounting prioritizes sales
  • Bookkeeping focuses on recording transactions, while accounting focuses on analyzing the data collected (correct)

    • What does an 'account' refer to in the world of bookkeeping?

  • A customer complaint log
  • A record of all financial transactions of a certain type (correct)
  • A marketing campaign report
  • An individual bank account

    • What is the role of a bookkeeper?

    <p>Recording financial transactions</p> Signup and view all the answers

    What are 'assets' in bookkeeping?

    <p>The cash and resources owned by the business</p> Signup and view all the answers

    Which of the following represents the money earned by the business, usually through sales?

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

    What are 'liabilities' in bookkeeping?

    <p>The obligations and debts owed by the business</p> Signup and view all the answers

    What is the value remaining after liabilities are subtracted from assets, representing the owner's held interest in the business?

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

    What is the term used for the cash that flows out from the business to pay for some item or service?

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

    What is the software commonly used to record accounts in a virtual record rather than a hard copy?

    <p>Google Sheets</p> Signup and view all the answers

    What represents the money owed by a business to its suppliers or creditors?

    <p><strong>Liabilities</strong></p> Signup and view all the answers

    Which method involves entering each transaction only once, suitable for very simple businesses?

    <p>Single-entry bookkeeping</p> Signup and view all the answers

    What is the value of everything the business owns and uses to operate, such as cash, equipment, and inventory?

    <p><strong>Assets</strong></p> Signup and view all the answers

    What is the term used for the value remaining after liabilities are subtracted from assets?

    <p><strong>Equity</strong></p> Signup and view all the answers

    Which type of bookkeeping software usually requires a high up-front fee but then becomes the property of the business?

    <p><strong>QuickBooks Desktop</strong></p> Signup and view all the answers

    What represents the cash that flows out from the business to pay for some item or service?

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

    Bookkeeping is the process of recording and organizing a business's financial transactions, and a bookkeeper is a person responsible for that process

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

    Bookkeeping is the primary way business owners can figure out if their business is profitable: keeping an eye on your ______ lets you identify financial challenges early on and address them before they blossom into full-fledged crises

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

    Bookkeeping also helps you identify areas of ______ expansion-areas you might not have noticed without clear financial reports you can interpret easily

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

    In general, a bookkeeper records transactions, sends ______, makes payments, manages accounts, and prepares financial statements

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

    Instead, an ______ is a record of all financial transactions of a certain type, like sales or payroll. There are five basic types of ______s:

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

    Assets, which are the cash and resources owned by the business (e.g., accounts receivable, inventory)

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

    Bookkeeping begins with setting up each necessary ______

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

    Most businesses use computer software to record ______

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

    The overall file for recording accounts is called the general ______

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

    There are three main methods for creating a ______

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

    Spreadsheet software is the cheapest option; Google Sheets doesn't cost a monthly fee, but trying to craft your own general ledger in a spreadsheet program can spiral quickly into ______

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

    If you plan to do your own books in the house instead of outsourcing to an accounting or bookkeeping firm, you need to make one crucial choice before you start setting everything up: Are you going to use single-entry bookkeeping or double-entry ______

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

    With single-entry bookkeeping, you enter each transaction only ______

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

    If a customer pays you a sum, you enter that sum in your ______ column only

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

    If you work out of your home, don't have any equipment or inventory to offer, and don't venture too frequently into the realm of cash transactions, you might consider single-entry ______

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

    Most bookkeeping is done ______

    <p>using computer software</p> Signup and view all the answers

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