Some Accounting Terms

Question 1

What is the accounting equation?

Answer 1

A = OE + L

Question 2

What are assets?

Answer 2

Possessions of the business that have value.

Question 3

What is owners equity?

Answer 3

Owners worth in the business.

Question 4

What are liabilities?

Answer 4

Businesses debts or obligations.

Question 5

What are the two types of assets?

Answer 5

Fixed assets and current assets.

Question 6

What are fixed assets?

Answer 6

Assets you have for more than 12 months.

Question 7

What are current assets?

Answer 7

Assets you have for less than 12 months.

Converted into cash more easily.

Question 8

What are the fixed assets?

Answer 8

Land and buildings.
Vehicles.
Equipment.

Question 9

What are the current assets?

Answer 9

Trading stock
Debtors control
Bank
Cash float
Petty cash

Question 10

What are the two accounts under owners equity?

Answer 10

Capital and drawings.

Question 11

What is capital?

Answer 11

Any money or item invested into the business by the owner.

Question 12

What are drawings?

Answer 12

Money or items that the owner takes for personal use.

Question 13

What are the accounts for income?

Answer 13

Current income
Rent income
Donation income

Question 14

What are the accounts for expenses?

(There are a lot) -18

Answer 14

Material cost
Wages
Stationery
Trading license 
Packing material
Insurance
Salaries
Telephone
Water and rates
Electricity
Consumables
Repairs
Advertising
Donation expense 
Postage
Refreshments
Rent expense
Motor expenses