WELL DETAILED
What is a general ledger? - ANSWER A general ledger account is an account or record
used to sort, store and summarize a company's transactions.
asset accounts such as Cash, Accounts Receivable, Inventory, Investments, Land, and
Equipment
liability accounts including Notes Payable, Accounts Payable, Accrued Expenses Payable, and
Customer Deposits
stockholders' equity accounts such as Common Stock, Retained Earnings, Treasury Stock,
and Accumulated Other Comprehensive Income
What is the difference between accounts payable and accounts receivable? -
ANSWER Accounts payable is a current liability account in which a company records
the amounts it owes to suppliers or vendors for goods or services that it received on credit.
Accounts receivable is a current asset account in which a company records the amounts it
has a right to collect from customers who received goods or services on credit.
What is the cost of goods sold? - ANSWER The cost of goods sold is the cost of the
products that a retailer, distributor, or manufacturer has sold.
What is owner's equity? - ANSWER Owner's equity is one of the three main sections of
a sole proprietorship's balance sheet and one of the components of the accounting
equation: Assets = Liabilities + Owner's Equity.
1
, What is principles of accounting? - ANSWER Principles of accounting can also refer to
the basic or fundamental accounting principles: cost principles, matching principles, full
disclosure principles, materiality principles, going concern principles, economic entity
principles, and so on. In this context, principles of accounting refers to the broad underlying
concepts which guide accountants when preparing financial statements.
What is equity? - ANSWER Equity can indicate an ownership interest in a business,
such as stockholders' equity or owner's equity.
Equity can mean an owner's interest in a personal asset. For example, the owner of a
$200,000 house that has a mortgage loan of $75,000 is said to have $125,000 of equity in
the house.
What is meant by reconciling an account? - ANSWER Reconciling an account is likely to
mean proving or documenting that an account balance is correct.
What is included in cash and cash equivalents? - ANSWER In accounting, a company's
cash includes the following:
currency and coins
checks received from customers but not yet deposited
checking accounts
petty cash
Cash equivalents are short-term, highly liquid investments with a maturity date that was 3
months or less at the time of purchase.
money market accounts
U.S. Treasury Bills
commercial paper
What is the difference between an implicit cost and an explicit cost? - ANSWER An
implicit cost is present but it is not initially shown or reported as a separate cost.
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What is a general ledger? - ANSWER A general ledger account is an account or record
used to sort, store and summarize a company's transactions.
asset accounts such as Cash, Accounts Receivable, Inventory, Investments, Land, and
Equipment
liability accounts including Notes Payable, Accounts Payable, Accrued Expenses Payable, and
Customer Deposits
stockholders' equity accounts such as Common Stock, Retained Earnings, Treasury Stock,
and Accumulated Other Comprehensive Income
What is the difference between accounts payable and accounts receivable? -
ANSWER Accounts payable is a current liability account in which a company records
the amounts it owes to suppliers or vendors for goods or services that it received on credit.
Accounts receivable is a current asset account in which a company records the amounts it
has a right to collect from customers who received goods or services on credit.
What is the cost of goods sold? - ANSWER The cost of goods sold is the cost of the
products that a retailer, distributor, or manufacturer has sold.
What is owner's equity? - ANSWER Owner's equity is one of the three main sections of
a sole proprietorship's balance sheet and one of the components of the accounting
equation: Assets = Liabilities + Owner's Equity.
1
, What is principles of accounting? - ANSWER Principles of accounting can also refer to
the basic or fundamental accounting principles: cost principles, matching principles, full
disclosure principles, materiality principles, going concern principles, economic entity
principles, and so on. In this context, principles of accounting refers to the broad underlying
concepts which guide accountants when preparing financial statements.
What is equity? - ANSWER Equity can indicate an ownership interest in a business,
such as stockholders' equity or owner's equity.
Equity can mean an owner's interest in a personal asset. For example, the owner of a
$200,000 house that has a mortgage loan of $75,000 is said to have $125,000 of equity in
the house.
What is meant by reconciling an account? - ANSWER Reconciling an account is likely to
mean proving or documenting that an account balance is correct.
What is included in cash and cash equivalents? - ANSWER In accounting, a company's
cash includes the following:
currency and coins
checks received from customers but not yet deposited
checking accounts
petty cash
Cash equivalents are short-term, highly liquid investments with a maturity date that was 3
months or less at the time of purchase.
money market accounts
U.S. Treasury Bills
commercial paper
What is the difference between an implicit cost and an explicit cost? - ANSWER An
implicit cost is present but it is not initially shown or reported as a separate cost.
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