INCOME & EXPENSE
DEFINE INCOME AND EXPENSE
What is another name for a statement of financial position?
Balance sheet
What is CAB?
How many accounts are involved in a transaction?
2
Does the balance sheet specify a period of time or a point in time?
Point in time
What is a loan?
CREDIT
What nature do assets, liabilities and owners equity have?
Assets = Debit
Liabilities + Owners Equity = Credit
Assets are usually reported on the balance sheet at which amount?
Cost
Recommended retail price
Current market value
Cost
WHAT IS REVENUE?
THE TOTAL AMOUNT OF INCOME
Which of the following is an asset account?
Accounts Payable
Accounts Receivable
Rent
Accounts Payable
What is capital?
CREDIT
What happens when an asset decreases?
Think of debit and credit in the nature of accounts table.
It turns into a credit.
What is the accounting equation for assets?
A = Liabilities + Owners Equity
OE= A-L
Credit
Fill in the blank:
For every ____ there must be a ____
Debit + Credit
True or False
The third line of the balance sheet heading for the end of the year should begin with "For the Year Ended".
False - The balance sheet shows a period of time only.
A person earns $20.35 an hour and works 31 hours a week. Weekly, they pay $396 in rent, $95 for food, $11 for their phone bill, $43 for electricity/water/gas and $60 for fuel. What is their disposable income?
$25
Is this statement of financial position in T form or Narrative form?
T form
A motor vehicle bought on loan
Credit
Explain what has happened in this scenario.
Land: DR $350,000
Cash at bank: CR $350,000
Land has been bought for $350,000
On December 1, ABC Co. hired Juanita Perez to begin working on January 2 at a monthly salary of $4,000. ABC's balance sheet of December 31 will show a liability of what amount?
$4,000
$48,000
No liability
No liability