Double-Entry (Open/Close)
Fill in the blanks: For every __________ there is a ________.
Debit, Credit
What is a trial balance?
A trial balance is a financial report showing the closing balances of all accounts in the general ledger at a point in time.
What is another name for the Trading Profit and Loss Account (TPL Account)?
Income Statement
What is a balance sheet?
A balance sheet is a financial statement that contains details of a company's assets or liabilities at a specific point in time.
What is a source document?
A source document is the original document that contains the details of a business transaction.
What is a transaction?
A transaction is a statement that tells us what happens on a daily basis.
When is a trial balance drawn up?
A trial balance is usually drawn up at the end of the business year.
What is the gross profit in the trading account?
The gross profit is the profit made before the expenses are deducted.
When is a balance sheet drawn up?
A balance sheet is drawn up at the end of a business year.
How many books of accounting are there?
Seven
Fill in the blanks: A liability must always be __________, while an asset must always be ___________.
True or False: A trial balance doesn't balance on its own.
False
What is the formula for Cost of Goods Sold?
COGS = Opening Stock + Purchases - Closing Stock
What is another name for a balance sheet?
Statement of Financial Position
What is an example of any source document?
Receipts, Invoices, Bills, Credit Notes, Bank Statements, Emails
List two examples of assets in double-entry and two examples of liabilities in double-entry.
Assets - Bank, Purchases, Return Inwards, Cash, Expenses
Liabilities - Sales, Return Outwards, Revenues
How many sides are on a trial balance? Name them.
Two Sides
Debit Side and Credit Side
Net Profit is the profit made after the expenses are deducted.
List the current assets on a balance sheet in the liquidity form.
Inventory, Accounts Receivables, Bank, Cash
Are source documents tangible or intangible?
Tangible
State the five steps to balance off/close off accounts in double-entry.
1.) Add both Debit + Credit side (put total on the side).
2.) Subtract smaller amount from larger amount (difference - balance c/d).
3.) Insert the difference on the smaller side.
4.) Insert the totals and double underline.
5.) Re-open the account for the following month with the balance b/d.
In the Accounting Cycle, the trial balance is step number _________.
Step #4
What is the TPL drawn up from?
The Trial Balance
State the format of the balance sheet.
Name of Business
Balance Sheet as at *end of business year date*
Non-Current Assets
Current Assets
Inventory
Accounts Receivables
Bank
Cash
Less Current Liabilities
Accounts Payables
Net Current Asset
Less Non-Current Liabilities
Loan
Net Asset
Financed By:
Capital
Add Net Profit
Less Drawings
List all the books of accounting.
Petty Cash Book, Cash Book, Sales Journal, Purchases Journal, Return Inwards Journal, Return Outwards Journal, General Ledger