Bookkeeping Basics Part 1, 2, 3AND 4 Lecture Notes
Study Material Updated Accounting Fundamentals
Exam Review Guide
A schedule that contains all accounts needed to prepare financial statements is known as:
Answer: The General Ledger
Reorganizing journal entries and grouping them by account is known as:
Answer: Posting to the ledger
A listing of the names of the accounts that a company has identified and made available for
recording transactions in its general ledger is known as a:
Answer: Chart of Accounts
What is the difference between accounting and bookkeeping?
Answer: A bookkeeper's job is to record transactions in the books of an entity. An accountant's
job is to use the information given by bookkeepers to prepare financial statements.
To find the balance of the account types that increase with a debit (asset and expense
accounts), bookkeepers will:
Answer: Subtract total credits from total debits (Debits - Credits)
The accounting cycle starts with the:
Answer: Analysis of business transactions
,Why is it important for an accountant to understand bookkeeping?
Answer: The accounts in the ledger are used to create the financial statements. The
bookkeeping system gives a more detailed overview of how the figures on the financial
statements are made. The accountant will need to look at and understand the books in order to
check for and most likely make adjustments.
What is the 'dual aspect concept'?
Answer: The dual aspect concept is that each transaction has 2 effects, as a transaction means
that there is a loss from somewhere (one account) in order for there to be a gain elsewhere
(another account). Double-entry bookkeeping uses this concept by recording the movement of
the transaction.
What determines whether an account should be debited or credited in a transaction?
Answer: The account credited is the account where the money comes from. The account that
money goes to is then debited.
After analysis, the business transaction is recorded in the journal in:
Answer: Chronological order
A form or statement that lists the titles and balances of all ledger accounts at a given date is
known as:
Answer: Trial balance
Sydney is entering a transaction in QuickBooks. What are the two steps of manual accounting
that will happen simultaneously as she does this?
Answer: Creating a journal entry and posting to the ledger
, The digits of the account numbers assigned to general ledger accounts often have significance.
For example, an account number beginning with a "1" might signify that the account is an asset
account, a "6" might signify an operating expense, etc.
Answer: True
A trial balance where total debits equal total credits indicates:
Answer: The ledger is in balance
Zach needs to determine what his company's financial position was on March 31st of last year.
Which of the following would be the best report to look at?
Answer: Balance sheet.
Which of the following financial statements reports the sources and uses of cash by a business?
Answer: Statement of Cash Flow
Which of the following lists general ledger account balances at the end of a reporting period,
before any adjusting entries are made?
Answer: Unadjusted Trial Balance
A trial balance that is prepared after taking into account all the adjusting entries is known as:
Answer: Adjusted Trial Balance
The preparation of financial statements and closing the books is the ______ step of the
accounting cycle
Answer: Last
Rudiger has just recorded and posted his business transactions to the ledger. His next step in the
accounting cycle is to _______.
Study Material Updated Accounting Fundamentals
Exam Review Guide
A schedule that contains all accounts needed to prepare financial statements is known as:
Answer: The General Ledger
Reorganizing journal entries and grouping them by account is known as:
Answer: Posting to the ledger
A listing of the names of the accounts that a company has identified and made available for
recording transactions in its general ledger is known as a:
Answer: Chart of Accounts
What is the difference between accounting and bookkeeping?
Answer: A bookkeeper's job is to record transactions in the books of an entity. An accountant's
job is to use the information given by bookkeepers to prepare financial statements.
To find the balance of the account types that increase with a debit (asset and expense
accounts), bookkeepers will:
Answer: Subtract total credits from total debits (Debits - Credits)
The accounting cycle starts with the:
Answer: Analysis of business transactions
,Why is it important for an accountant to understand bookkeeping?
Answer: The accounts in the ledger are used to create the financial statements. The
bookkeeping system gives a more detailed overview of how the figures on the financial
statements are made. The accountant will need to look at and understand the books in order to
check for and most likely make adjustments.
What is the 'dual aspect concept'?
Answer: The dual aspect concept is that each transaction has 2 effects, as a transaction means
that there is a loss from somewhere (one account) in order for there to be a gain elsewhere
(another account). Double-entry bookkeeping uses this concept by recording the movement of
the transaction.
What determines whether an account should be debited or credited in a transaction?
Answer: The account credited is the account where the money comes from. The account that
money goes to is then debited.
After analysis, the business transaction is recorded in the journal in:
Answer: Chronological order
A form or statement that lists the titles and balances of all ledger accounts at a given date is
known as:
Answer: Trial balance
Sydney is entering a transaction in QuickBooks. What are the two steps of manual accounting
that will happen simultaneously as she does this?
Answer: Creating a journal entry and posting to the ledger
, The digits of the account numbers assigned to general ledger accounts often have significance.
For example, an account number beginning with a "1" might signify that the account is an asset
account, a "6" might signify an operating expense, etc.
Answer: True
A trial balance where total debits equal total credits indicates:
Answer: The ledger is in balance
Zach needs to determine what his company's financial position was on March 31st of last year.
Which of the following would be the best report to look at?
Answer: Balance sheet.
Which of the following financial statements reports the sources and uses of cash by a business?
Answer: Statement of Cash Flow
Which of the following lists general ledger account balances at the end of a reporting period,
before any adjusting entries are made?
Answer: Unadjusted Trial Balance
A trial balance that is prepared after taking into account all the adjusting entries is known as:
Answer: Adjusted Trial Balance
The preparation of financial statements and closing the books is the ______ step of the
accounting cycle
Answer: Last
Rudiger has just recorded and posted his business transactions to the ledger. His next step in the
accounting cycle is to _______.
