Bookkeeping Final Exam review
Questions and Answers
Balance Statement - Answer -(Records)
This shows what you own
Assets + Liabilities
Owner's Equity is the difference between these two
Income Statement - Answer -This shows the revenue (income) earned and the
operating cost incurred. Net Income is the difference between revenue & cost
Assets - Answer -Things of value
Ex. cash, buildings, equipment, merchandise for sale
Increased with a debit and decreases with a credit
Liabilities - Answer -Debts owing to others
Ex. Credit cards, bank loans, and mortgages
Increases with a credit & decreases with a debit
Owners Equity - Answer -The value of assets that remains after all debts have been
paid off
Increases with a credit and decreases with a debit
Revenues - Answer -Earnings from the sales of goods and services to customers
A business can have more than one kind of revenue
Increases with a credit and decreases with a debit
Expenses - Answer -Cost of operating the business
Ex. Rent, Salaries, Electricity, Water, Advertising
Increases with a debit and decreases with a credit
5 Classes of Accounts - Answer -Assets
Liabilities
Owners Equity
Revenue
Expenses
Business Entity Concept - Answer -All accounts must be kept separate from personal
expenses
Conservatism Principle - Answer -Information must be fair and reasonable
Questions and Answers
Balance Statement - Answer -(Records)
This shows what you own
Assets + Liabilities
Owner's Equity is the difference between these two
Income Statement - Answer -This shows the revenue (income) earned and the
operating cost incurred. Net Income is the difference between revenue & cost
Assets - Answer -Things of value
Ex. cash, buildings, equipment, merchandise for sale
Increased with a debit and decreases with a credit
Liabilities - Answer -Debts owing to others
Ex. Credit cards, bank loans, and mortgages
Increases with a credit & decreases with a debit
Owners Equity - Answer -The value of assets that remains after all debts have been
paid off
Increases with a credit and decreases with a debit
Revenues - Answer -Earnings from the sales of goods and services to customers
A business can have more than one kind of revenue
Increases with a credit and decreases with a debit
Expenses - Answer -Cost of operating the business
Ex. Rent, Salaries, Electricity, Water, Advertising
Increases with a debit and decreases with a credit
5 Classes of Accounts - Answer -Assets
Liabilities
Owners Equity
Revenue
Expenses
Business Entity Concept - Answer -All accounts must be kept separate from personal
expenses
Conservatism Principle - Answer -Information must be fair and reasonable
