INTRODUCTION TO BOOKKEEPING EXAM REVIEW QUESTIONS WITH CORRECT ANSWERS

INTRODUCTION TO BOOKKEEPING
EXAM REVIEW QUESTIONS WITH
CORRECT ANSWERS
Bookkeeping - ANSWER-The process of recording business transactions

Service Business - ANSWER-A business that performs for a service fee.

Account - ANSWER-Is a record pertaining to a single item in the accounting equation
that summarizes all the information about the item.

Account title - ANSWER-Refers to the name given to each account

Account balance - ANSWER-Refers to the amount in each account

Transaction - ANSWER-is any activity that occurs in the business that changes part of
the accounting equation (assets, liabilities or owners equity

Assets - ANSWER-is anything of valued owned or used by the business

Liability - ANSWER-Is what a business owes

Account payable - ANSWER-The account used to summarizes money owed by a
business

What is the Accounting Equation Formula - ANSWER-Asset = Liability + Owner's Equity

Owner's Equity - ANSWER-The part of the business that belongs to the owner of the
business

Capital Account - ANSWER-The account used to summarize owner's equity

Cash - ANSWER-Is an asset account that summarizes all the information about the
money available in the business

What are examples of Assets - ANSWER-Cash, Supplies, Prepaid Insurance, Office
Equipment

Balance Sheet - ANSWER-is a financial statement that reports a business assets,
liabilities, and owner's equity on a specific date

The parts of the balance sheet are the following: - ANSWER-assets, liabilities and
owner's equity