Bookkeeping Final Exam review Questions with Answers

Bookkeeping Final Exam review
Questions with Answers
Balance Statement - -(Records)
This shows what you own
Assets + Liabilities
Owner's Equity is the difference between these two

-Income Statement - -This shows the revenue (income) earned and the
operating cost incurred. Net Income is the difference between revenue &
cost

-Assets - -Things of value
Ex. cash, buildings, equipment, merchandise for sale
Increased with a debit and decreases with a credit

-Liabilities - -Debts owing to others
Ex. Credit cards, bank loans, and mortgages
Increases with a credit & decreases with a debit

-Owners Equity - -The value of assets that remains after all debts have been
paid off
Increases with a credit and decreases with a debit

-Revenues - -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 - -Cost of operating the business
Ex. Rent, Salaries, Electricity, Water, Advertising
Increases with a debit and decreases with a credit

-5 Classes of Accounts - -Assets
Liabilities
Owners Equity
Revenue
Expenses

-Business Entity Concept - -All accounts must be kept separate from
personal expenses

-Conservatism Principle - -Information must be fair and reasonable
Values must not be overstated or understated
The way an accountant can choose to report things with the business