Bookkeeping Test Questions and
Answers Already Passed
What is a ledger account?
✔✔ A ledger account is a detailed record of all transactions related to a specific account, such as
cash, accounts receivable, or accounts payable.
What does it mean to "post" in bookkeeping?
✔✔ To "post" means to transfer information from the journal to the appropriate ledger accounts.
What is the purpose of a bookkeeping system?
✔✔ The purpose of a bookkeeping system is to maintain accurate financial records, track
financial transactions, and provide data for financial reporting.
What is an accrual?
✔✔ An accrual is an accounting method where revenues and expenses are recorded when they
are earned or incurred, regardless of when the cash is received or paid.
What is the difference between capital and revenue expenditures?
1
, ✔✔ Capital expenditures are investments in long-term assets that benefit the business for more
than one accounting period, while revenue expenditures are short-term costs that are expensed in
the period they are incurred.
What is a cash flow statement?
✔✔ A cash flow statement reports the cash inflows and outflows from operating, investing, and
financing activities over a specific period.
How do you record depreciation in bookkeeping?
✔✔ Depreciation is recorded as an expense in the income statement and a reduction in the value
of the related asset in the balance sheet.
What is the purpose of a subsidiary ledger?
✔✔ A subsidiary ledger provides detailed information for a specific account, such as accounts
receivable or accounts payable, which supports the general ledger.
What is a chart of accounts?
✔✔ A chart of accounts is a list of all accounts used by a business, organized by category, to
help in the recording and reporting of financial transactions.
2
Answers Already Passed
What is a ledger account?
✔✔ A ledger account is a detailed record of all transactions related to a specific account, such as
cash, accounts receivable, or accounts payable.
What does it mean to "post" in bookkeeping?
✔✔ To "post" means to transfer information from the journal to the appropriate ledger accounts.
What is the purpose of a bookkeeping system?
✔✔ The purpose of a bookkeeping system is to maintain accurate financial records, track
financial transactions, and provide data for financial reporting.
What is an accrual?
✔✔ An accrual is an accounting method where revenues and expenses are recorded when they
are earned or incurred, regardless of when the cash is received or paid.
What is the difference between capital and revenue expenditures?
1
, ✔✔ Capital expenditures are investments in long-term assets that benefit the business for more
than one accounting period, while revenue expenditures are short-term costs that are expensed in
the period they are incurred.
What is a cash flow statement?
✔✔ A cash flow statement reports the cash inflows and outflows from operating, investing, and
financing activities over a specific period.
How do you record depreciation in bookkeeping?
✔✔ Depreciation is recorded as an expense in the income statement and a reduction in the value
of the related asset in the balance sheet.
What is the purpose of a subsidiary ledger?
✔✔ A subsidiary ledger provides detailed information for a specific account, such as accounts
receivable or accounts payable, which supports the general ledger.
What is a chart of accounts?
✔✔ A chart of accounts is a list of all accounts used by a business, organized by category, to
help in the recording and reporting of financial transactions.
2
