Introduction of Accounting

Question 1

ASSET

Answer 1

The things that you own that have a dollar value

Question 2

LIABILITY

Answer 2

debts or obligations a person or company owes to someone else.

Question 3

OWNER’S EQUITY

Answer 3

The difference between assets and total liabilities

Question 4

What is MORTGAGE?

Answer 4

an agreement between you and a lender that gives the lender the right to take your property if you fail to repay the money you’ve borrowed plus interest.

Question 5

How do you calculate OWNER’S EQUITY?

Answer 5

Assets - Liabilities

Question 6

How do you calculate ASSETS?

Answer 6

Liabilities + Owner’s Equity

Question 7

How do you Calculate LIABILITIES?

Answer 7

add together all the money you owe lenders within the next year (within 12 months or less).

Question 8

What is ACCOUNTING

Answer 8

A system of dealing with financial data that provides information for decision-making

Question 9

5 MAIN ACTIVITIES INVOLVED IN ACCOUNTING

Answer 9

1. Gathering financial information
2. Preparing and collecting permanent records
3. Rearranging, summarizing, and classifying
4. Preparing information reports and summaries
5. Establishing controls to promote accuracy and honesty among employees

Question 10

SERVICE BUSINESS

Answer 10

Sells a service to the public; it does not make or sell a product as its main activity.

eg. Hairdresser salon

Question 11

MERCHANDISING BUSINESS

Answer 11

Buys goods and resells them at a higher price for profit

eg. Clothing stores

Question 12

PRODUCING BUSINESS

Question 13

NON-PROFIT ORGANIZATION

Question 14

LIQUIDITY

Answer 14

The order in which assets could be most quickly converted into cash

Question 15

ACCOUNTS RECEIVABLE

Answer 15

Debts of customers

Question 16

ACCOUNTS PAYABLE

Answer 16

Debts OWED by the business,

Question 17

CREDITOR

Answer 17

A creditor is anyone to whom the business owes money

Question 18

DEBTOR

Answer 18

A debtor is anyone who owes money to the business

Question 19

LIQUIDITY

Answer 19

the ease with which an asset, or security, can be converted into ready cash without affecting its market price.

Question 20

FISCAL PERIOD

Answer 20

Accounting activites are performed in equal periodsof time ( max length period is 1 year) ( monthly, yearly, quartly)

Question 21

ACCOUNTING CYCLE

Answer 21

A reccuring set of accounting procedures carried out during each fiscal period

Question 22

ROUTINE DAILY ACTIVITIES

Answer 22

• activities that occur nearly every
  Cash deposits, writing cheques, electronic fund transfers ( e-transfer)

Question 23

REVENUE

Answer 23

the total amount of income generated by the sale of goods or services related to the company’s primary operations.