Chapter 4 & 5: Double Entry Principles & Accounting for Inventory

Question 1

What is an account?

Answer 1

An account is an individual accounting record that shows either an increase or decrease in a specific asset, liability, equity, revenue and expenses.

Question 2

What are the 3 types of inventories?

Answer 2

Raw materials inventory, work in progress inventory (both under manufacturing companies) and finished goods inventory.

Question 3

What is the closing inventory?

Answer 3

Goods purchased that are not sold at the end of the accounting period.
Categorised as current asset.