BOOKKEEPING TERMS REVIEW EXAM
QUESTIONS AND ANSWERS
Journal - ANSWER-Record of financial transaction from original documents ( checks,
receipts, invoices)
Chart of accounts - ANSWER-Acts like folders where specific transactions are placed
Assets - ANSWER-anything of value owned by a business
Liabilities - ANSWER-amounts owed by the business
owners equity or capital - ANSWER-investment of the owners, and accumulation of
profit or losses
Revenue - ANSWER-the value resulting from sales of goods or services over a period
of time
cost of goods sold - ANSWER-CGS cost of products sold by the business
operating expenses - ANSWER-expenses associated with the operation of a business
(lights on, paying salaries)
3 purposes of book keeping - ANSWER-Record, classify, organize financial transaction
debit - ANSWER-increase in assets decrease in liability
credit - ANSWER-decrease in assets increase in liability
5 major types of accounts - ANSWER-assets, liabilities, income, expense, equity
Sales and Revenue - ANSWER-Top Line of the income Statement the money that
comes in from customers
profits, earning and income - ANSWER-Bottom line of the income statement what is left
over from revenue after all the cost and expenses spent in generating that revenue are
subtracted.
Costs - ANSWER-money spent making a product (materials and labor)
Expenses - ANSWER-Money spent to develop it, sell it, account for it and manage the
whole process
QUESTIONS AND ANSWERS
Journal - ANSWER-Record of financial transaction from original documents ( checks,
receipts, invoices)
Chart of accounts - ANSWER-Acts like folders where specific transactions are placed
Assets - ANSWER-anything of value owned by a business
Liabilities - ANSWER-amounts owed by the business
owners equity or capital - ANSWER-investment of the owners, and accumulation of
profit or losses
Revenue - ANSWER-the value resulting from sales of goods or services over a period
of time
cost of goods sold - ANSWER-CGS cost of products sold by the business
operating expenses - ANSWER-expenses associated with the operation of a business
(lights on, paying salaries)
3 purposes of book keeping - ANSWER-Record, classify, organize financial transaction
debit - ANSWER-increase in assets decrease in liability
credit - ANSWER-decrease in assets increase in liability
5 major types of accounts - ANSWER-assets, liabilities, income, expense, equity
Sales and Revenue - ANSWER-Top Line of the income Statement the money that
comes in from customers
profits, earning and income - ANSWER-Bottom line of the income statement what is left
over from revenue after all the cost and expenses spent in generating that revenue are
subtracted.
Costs - ANSWER-money spent making a product (materials and labor)
Expenses - ANSWER-Money spent to develop it, sell it, account for it and manage the
whole process
