BOOKKEEPING FOR DUMMIES EXAM
QUESTIONS AND ANSWERS
Balance Sheet - ANSWER-A financial statement that reports assets, liabilities, and
owner's equity on a specific date.
Assets - ANSWER-All things a company owns such as buildings, cash, land, and cars
Liabilities - ANSWER-Amounts owed to creditors in the form of debts and other
obligations.
Equity - ANSWER-All the money invested in a company by its owners. In small
businesses its shown in a capital account.
Income Statement - ANSWER-A financial statement that reports a company's revenues
and expenses and resulting net income or net loss for a specific period of time.
Revenue - ANSWER-All moneys brought in by your business or company
costs of good sold (COGS) - ANSWER-All money spent to purchase or make products
or services a company plans to sell to customers.
Expenses - ANSWER-All money spent to operate the company that is not directly
related to the sales of individual goods or services.
Accounting Period - ANSWER-The time for which financial information is being tracked
usually monthly.
Accounts Receivable - ANSWER-The account used to track all customer sales that are
made by store credit.
Store Credit - ANSWER-Not credit card sales but sales which the store directly gives
the customer credit and needs to collect payment from the customer at a later date
Accounts Payable - ANSWER-The account used to track all outstanding bills from
vendors, contractors, consultants, and other companies or any other companies from
whom the companies buys goods or services.
Depreciation - ANSWER-A lessening value of assets over time such as vehicle which
lose value every year.
General Ledger - ANSWER-Where all the company accounts are summarized. It
provides a good history of your transactions chronologically.
QUESTIONS AND ANSWERS
Balance Sheet - ANSWER-A financial statement that reports assets, liabilities, and
owner's equity on a specific date.
Assets - ANSWER-All things a company owns such as buildings, cash, land, and cars
Liabilities - ANSWER-Amounts owed to creditors in the form of debts and other
obligations.
Equity - ANSWER-All the money invested in a company by its owners. In small
businesses its shown in a capital account.
Income Statement - ANSWER-A financial statement that reports a company's revenues
and expenses and resulting net income or net loss for a specific period of time.
Revenue - ANSWER-All moneys brought in by your business or company
costs of good sold (COGS) - ANSWER-All money spent to purchase or make products
or services a company plans to sell to customers.
Expenses - ANSWER-All money spent to operate the company that is not directly
related to the sales of individual goods or services.
Accounting Period - ANSWER-The time for which financial information is being tracked
usually monthly.
Accounts Receivable - ANSWER-The account used to track all customer sales that are
made by store credit.
Store Credit - ANSWER-Not credit card sales but sales which the store directly gives
the customer credit and needs to collect payment from the customer at a later date
Accounts Payable - ANSWER-The account used to track all outstanding bills from
vendors, contractors, consultants, and other companies or any other companies from
whom the companies buys goods or services.
Depreciation - ANSWER-A lessening value of assets over time such as vehicle which
lose value every year.
General Ledger - ANSWER-Where all the company accounts are summarized. It
provides a good history of your transactions chronologically.
