Accounting and Bookkeeping Flashcards
List responsibilities of an accountant
Provide reliable and relevant information
Auditing
Introduce accounting procedures to businesses
Prepare financial statements
Analyse financial information
Financial advice for businesses
Produce budgets
Ensure statements and tax is submitted on time
Management accounting
Focuses on planning, control and decision making within the business.
Information is used internally by managers and senior employees to make decisions
Financial accounting
Using historical information to prepare financial statements
Describe the role of a bookkeeper
Recording day to day transactions
Maintaining accounting records
Entering transactions in the BoPE
Checking the accuracy of records
Why should you keep accounting records
To quantify items such as sales showing what has happened in the past
To record amounts due from TR and to TP
Reduce risk of fraud
Enables production of financial statements
Production of forecasts
Monitor performance
Provide information to the owner
What is the Accounting Equation?
A = C+L
What is an asset?
something you own
What is a liability?
something you owe
What is capital?
resources/money supplied by the owner
Give 3 examples of assets
vehicles, equipment, property, fixtures, inventory, cash, bank
Give 2 examples of liabilities
loan, mortgage, trade payable
what is meant by dual aspect?
every transaction has 2 effects
What is a ledger?
A book/spreadsheet that records T accounts
What does a T account record?
All information related to a particular item
What do you call the left hand side of a T account?
Debit
What do you call the right hand side of a T account?
Credit
What do you record at the top of a T account?
the name of the account
What do you do to increase an asset?
Dr
What do you do to increase a liability?
Cr
What do you do to increase capital?
Cr
What do you do to decrease an asset?
Cr
What do you do to decrease a liability ?
Dr
What do you do to decrease capital?
Dr
How do you know what label to use for an entry in a T account?
It is the name of the other account involved in the transaction
What do you call it when the owner takes money out for his/her own use?
Drawings
What are Sales Returns also known as and what side of the account do you make an entry on?
Returns In; Dr - increase asset of inventory
What are Purchase Returns also known as and what side of the account do you make an entry on?
Returns Out; Cr - decrease asset of inventory
What is stock also known as?
Inventory
Explain what is meant by Purchases and what type of account is Purchases?
Goods bought to sell on; Asset a/c
What do you do in a Sales a/c… Dr or Cr?… Why?
Cr - decrease Asset of inventory
What do you call people you sell to on credit and what TYPE of account are they?
Trade RECEIVABLES - Asset a/c… you OWN their debt
What do you call people you buy from on credit and what TYPE of account are they?
Trade PAYABLES - Liability a/c… you OWE the debt
Name the 2 a/cs in this transaction AND identify Dr and Cr - Bought goods on credit from G Hunter
Dr Purchases; Cr G Hunter
Name the 2 a/cs in this transaction AND identify Dr and Cr - Returned goods to T Hughes
Dr T Hughes; Cr Purchase Returns
Name the 2 a/cs in this transaction AND identify Dr and Cr - J Reid returned goods to us
Dr Sales Returns; Cr J Reid
Name the 2 a/cs in this transaction AND identify Dr and Cr - Sold goods to J Kane on credit
Name the 2 a/cs in this transaction AND identify Dr and Cr - Sold goods to J Kane on credit
Give 3 examples of expenses
Wages, insurance, electricity, heat and light, rent
Give 2 examples of income (other than Sales)
rent received, interest received, commission received, dicount received
What do you do to an Expense a/c?
Dr
What do you do to an Income a/c?
Cr
What do you do to the Drawings a/c?
Dr
What do we mean by the balance of a T a/c?
The different between the totals of each side
What do we call the balance below the totals?
Balance b/d
What do we call the balance above the totals?
Balance c/d
What 2 things are important about the totals when we balance a T a/c?
They are the same and they are parallel
