Introduction to bookkeeping

Question 1

Transactions

Answer 1

Exchange of goods and services between two parties or person’s for money or money’s worth

Question 2

Monetary Transactions

Answer 2

Transactions which involves an exchange of money or money’s worth directly or indirectly

Question 3

Cash Transactions

Answer 3

Those business transactions in which cash is paid or received immediately

Question 4

Credit Transactions

Answer 4

transactions where the payment / receipt of cash is not received immediately, but is paid at a later date

Question 5

Non- Monetary Transactions

Answer 5

Transactions that are carried out without the involvement of money or money’s worth, directly or indirectly

Question 6

Entry

Answer 6

Recording of a business transaction in the proper form / method in the books of accounts

Question 7

Narration

Answer 7

A brief explanation for a business transaction for which an entry is passed

Question 8

Goods

Answer 8

The term goods refers to merchandise which a trader trades

Question 9

Capital

Answer 9

The total amount invested into the business

it is always to be credited

Question 10

Drawings

Answer 10

The amount of cash / value of goods, assets etc., withdrawn from the business by the owner for personal use

it is always to be debted

Question 11

Debtor

Answer 11

A person who has to pay to the business for getting goods and services on credit

Question 12

Creditor

Answer 12

A person to whom business has to pay for getting goods and services on credit

Question 13

Bad debts

Answer 13

An irrecoverable amount from a debtor.

Question 14

Expenditure

Answer 14

The amount spent by the business for any consideration received by the business

Question 15

Capital Expenditure

Answer 15

The expenditure incurred to acquire a fixed asset or to increase the value of fixed assets

Question 16

Revenue Expediture

Answer 16

Expenditure from which the benefit is received immediately or for a short term, generally less than on year

Question 17

Deferred Revenure Expediture

Answer 17

Expenditure which is revenue in nature but provides benefit for more than one year

Question 18

Trade discount

Answer 18

Discount that is allowed at the time of purchase or sale of goods

Question 19

Cash Discount

Answer 19

Discount is given to encourage payment

Question 20

Solvent

Answer 20

A person who’s assets are more than liabilities

Question 21

Insolvent

Answer 21

A person who’s liabilities are more than his assets.

Question 22

Bookkeeping

Answer 22

recording of business transactions in the books of accounts in a systematic way