Bookkeeping Intro Flashcards
What is the role of a book keeper?
- Records financial transactions in ledgers and accounting software
- Maintains accurate and up to date financial records
- Processes invoices, receipts and payments
- Reconciles bank statements and ensures accuracy
- Generates financial reports and statements
- Assists in preparation of budgets and financial forecasts
- Supports the accountant with necessary financial data and documentation.
In Bookkeeping, what are assets?
Assets are resources owned by a business that have economic value eg: cash, inventory, equipment and property
In Bookkeeping, what are liabilities?
Liabilities are debts or obligations that a business owns to external parties, eg: loans, accounts payable and accrued expenses.
In Bookkeeping, what is Equity?
Equity is the ownership interest in a business.
How is equity calculated?
By subtracting liabilities from assets.
Eg: Equity=Assets- Liabilities
In book keeping, what is Revenue?
Revenue is income earned by a business from it’s primary operations, eg: sales of products or services, rent and interest.
In Bookkeeping, what are Expenses?
Expenses are costs incurred by a business in order to generate revenue, eg: salaries, rent, utilities and inventory costs.
What are Accounts Payable?
Accounts Payable are amounts owed by a business to its suppliers or vendors for goods or services received but not yet paid for.
What are Accounts receivable?
Accounts receivable are amounts owed to a business by it’s customers for goods and services provided on credit. It represents the company’s right to collect payment.
What is a Balance sheet?
A balance sheet is a financial statement that shows the company’s assets, liabilities and equity at a specific point in time. It is a snapshot of a company’s financial position.
What is an income statement?
An income statement shows the revenues, expenses and net income or loss of a business over a specific period of time. It reflects the company’s financial performance.
What is a cash flow statement?
A cash flow statement tracks the inflow and the outflow of cash in a business. It shows the sources and uses of cash.
What is a General Ledger?
The General Ledger is a record that contains all the accounts and transactions of a business. It serves as a central repository of financial information.
What is a Trial Balance?
A Trial Balance is a list of all of the accounts and their balances at a specific point in time. It ensures that the debits and credits in the accounting system are equal and helps identify errors or discrepancies.
Bookkeeping software automates repetitive tasks, saving time and reducing errors. This allows time to focus on value added activities, eg:
Data analysis and financial planning
