SlimStuderen B: Analysis of Transactions

Question 1

Transactions

Answer 1

Any event that has a financial influence on the business. Reflects increases or decreases

Question 2

Every transaction has to be recorded based on a…

Answer 2

Double-entry accounting system

Question 3

Account

Answer 3

Holds records for all changes in certain liability, asset or shareholder’s equity during certain time period

Question 4

Cash

Answer 4

Any medium of exchange

Question 5

Accounts receivable

Answer 5

Account where all future cash collections are stated

Question 6

Notes receivable

Answer 6

More binding than accounts receivable, promissory note signed

Question 7

Inventory

Answer 7

Amount of products the company has on stock

Question 8

Prepaid expenses

Answer 8

Paid for certain items in advance, such as rent or insurance. Assets because represent future economic benefit for company

Question 9

PPE

Answer 9

Property Plant Equipment - Assets which are expected to be used for more than one period for production or supply of goods or services
e.g. land, buildings, fixtures, furniture, equipment

Question 10

Accounts payable

Answer 10

Promise to pay a debt arising from a purchase at credit

Question 11

Notes payable

Answer 11

Amount the company must pay to another person or company because it signed notes promising to do it in the future

Question 12

Accrued liabilities

Answer 12

Expense that the company has not yet paid for.

e.g. interest payable and salary payable

Question 13

Share capital

Answer 13

Total owners investment in the company

Question 14

Retained earnings

Answer 14

Cumulative net income earned by a company over its lifetime, minus cumulative net losses and dividends

Question 15

Dividends

Answer 15

Dividend payouts to shareholders, decreases retained earnings

Question 16

Double entry accounting

Answer 16

Every transaction affects at least two accounts, T-account

Question 17

Debit and credit increases and decreases

Answer 17

Assets - Increase=Debit Decrease=Credit
Liabilities - Increase=Credit Decrease=Debit
Shareholders equity - Increase=Credit Decrease=Debit

Question 18

Ledger

Answer 18

Grouping of all T-accounts with their balances

Question 19

Trial balance

Answer 19

Sates all accounts with their balances

Question 20

Slide (error)

Answer 20

$40 written as $400

Question 21

Transposition (error)

Answer 21

$1,200 written as $2,100

Question 22

Debit accounts

Answer 22

Assets, Dividends, Expenses

Question 23

Credit accounts

Answer 23

Liabilities, shareholders equity overall, share capital, retained earnings, income