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POA STUDYING Flashcards

1
Q

what is accounting

A

It’s the language of business.
its is the way that people communicate using accounting phares and documents.

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2
Q

what is the formula for accounts

A

asset= capital+Liability
capital= asset- liability
liability= asset- capital

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3
Q

what is an asset

A

an asset is anything value that is owed by an individual or a business.

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4
Q

what are the 2 types of assets

A

fixed and currents asset

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5
Q

what is a fixed asset

A

a fixed asset is to help the business run they are not bought for resale

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6
Q

examples of fixed assets

A

land, building, furniture etc.

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7
Q

what are current assets

A

they are the asset the business intends to convert into cash

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8
Q

examples of current assents

A

inventory / stock, cash at bank, debtors

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9
Q

what are current liability

A

short term debt that our firm must pay less than 12 months

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10
Q

examples of current liability

A

creditors, bank over draft, accured

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11
Q

what are long term liability

A

debts our firm must pay in 12 months

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12
Q

example of long term liability

A

bank loans, mortgage

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13
Q

what is capital

A

cash or other assets invested into a business.

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14
Q

what is purchase account

A

it is use when our firm buys goods by cash, cheque or on credit

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15
Q

what is sale account

A

it is use when our firm sells goods by cash, cheque or on credit

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16
Q

what should happen to the purchase account

A

it must be debited and the other account credited.

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17
Q

what should happen to the sales account

A

it must be credited and the other account must be debited

18
Q

what is return outwards account

A

it is when our firm returns goods to the supplier because the goods either been spoiled, damage

19
Q

what should happen to the returns outward account

A

must be entered on the credit side and the other account on the debit side

20
Q

what is return inwards account

A

it is when the customer has returned goods back to our firm either because the goods were damaged or spoiled.

21
Q

what should happen to the returns inward account

A

must be entered on the debit side and the other account credit side

22
Q

what is drawing account

A

when the proprietor removes money out of the business for her/his uses

23
Q

what is a revenue

A

these are sums of money received by our firm.

24
Q

examples of revenues

A

rent receivable, commisions receivable, bad debt recover,discount receivable

25
Q

what are expenses

A

bills are firm must pay

26
Q

what is a personal account

A

an account that is named after a person or a firm

27
Q

who are debtors

A

debtors are people who owe us sums of money

28
Q

who are creditors

A

creditor are people who we owe sums of money to

29
Q

how can you tell when some one is a debtor

A

by looking at a personal account and the b/d is on the debit side

30
Q

how can you tell when some one is a creditor

A

by looking at a personal account and the b/d is on the credit side

31
Q

what is a trial balance

A

It’s a financel statment use to check arithmitcal accurcy of double entry records

32
Q

what is an income statement

A
33
Q

what is a balance sheet

A

financal statement that is use to show value at a spacific time and point

34
Q

what is carriage inwards

A

when our firm buys goods and have to pay for transportation for the goods to be delivered

35
Q

gross profit

A

this is profit before bills have been paid

36
Q

what is net profit

A

this is profit after all expenses have been paid

37
Q

what does ledgers contain

A

T.Accounts

38
Q

what does journals contain

A

list and expantory notes

39
Q

sale ledger

A

contains all the accounts of persons and firms that our business sells goods on credit

40
Q

purchase ledger

A

contain all the accounts of person and business that our firm purchases goods from on credit

41
Q

cash book

A

a special ledger that contains both cash and bank

42
Q

general ledger

A

contains all other accounts Like:
purchase account, revenue account, etc

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