Introduction to accounting

Question 1

Book-keeping

Answer 1

The detailed recording of all the financial transactions of a business

Question 2

Accounting

Answer 2

Using book-keeping records to prepare financial statements and to assist in decision making

Question 3

Statement of financial position

Answer 3

Shows the assets and liabilities of a business on a certain date

Question 4

Capital

Answer 4

The total resources provided by the owner and represents what the business owes the owner

Question 5

Assets

Answer 5

Represents anything owned by or owing to the business

Question 6

Liabilities

Answer 6

Represents anything owed by the business

Question 7

Accounting equation

Answer 7

Assets = Capital + Liabilities
or
Assets = Owner’s Equity + Liabilities

Question 8

Statement of financial position format

Answer 8

Assets
Non-current assets
Current assets
Total assets

Capital and Liabilities
Capital/ Equity
Non-Current Liabilities
Current liabilities
Total Capital and Liabilities