ITBK

Question 1

What is the 2 definition of an asset?

Answer 1

What the business owns
What is owed to the business

Examples: a van, oven, computer, cash etc

Question 2

What do we called the people who owe business money?

Answer 2

Receivables (bought goods on credit)

Question 3

What is a liability?

Answer 3

Something the business owes

Question 4

What is a payable?

Answer 4

When someone has bought raw materials and has not made any payment up front

Question 5

What is Capital?

Answer 5

The amount of money a business has initially invested

Capital = Original Money Invested + Profits - Drawings

Also what is owed to the owner

Question 6

What is a ‘Single Entity Concept’ ?

Answer 6

When you separate the business and the owner

Question 7

What is the accounting equation?

Answer 7

Assets = Liabilities + Capital

Question 8

What is DEAD CLIC?

Answer 8

DEBIT SIDE (will reduce anything on credit side)

Expenses
Assets
Drawings

CREDIT SIDE (will reduce anything on debit side)

Liabilities
Income
Capital

Question 9

What is a ‘Ledger Code’?

Answer 9

Unique reference given to different types of income, expenses, assets and liabilites

Question 10

What is a customer account code?

Answer 10

Unique reference given to each individual customer

Question 11

What is a supplier account code?

Answer 11

Unique reference given to each individual supplier

Question 12

What is a product code?

Answer 12

Unique reference given to each type of product