Transactions
Explain the difference between a cash and an on account transaction
A cash transaction is paid immediately; the on account (A/P or credit) transaction is paid at a later date
What is a source document?
Original paper or electronic record of a transaction; e.g., invoice, receipt.
In a journal entry, what side is the debit on?
Left
What is a ledger account?
A record of all transactions for a specific account.
What is the longest river in the world?
The Nile River
A business buys inventory worth $800 on credit. Which accounts are affected and how?
Inventory (Debit ↑), Accounts Payable (Liability ↑)
Why are source documents important in accounting?
They provide evidence to support transactions and ensure accuracy.
What is a journal in accounting?
A book where transactions are first recorded in chronological order.
What is “balancing” a ledger account?
Ensuring total debits = total credits and calculating the balance.
What does "www" stand for in a website browser?
World Wide Web
An owner contributes $10,000 cash into the business, what would be the credit and what would be the debit?
Credit: Capital
Debit Bank
Receipt for $275, GST 15%. What is the amount before GST?
$275 ÷ 1.15 = $239.13
Where would you classify "bought equipment for $2,000 cash." in a journal?
Dr Equipment $2,000
Cr Cash $2,000
What is the difference between drawings and expenses?
Drawings are personal withdrawals by the owner; expenses are business costs.
What language has the most native speakers worldwide?
Mandarin
Classify each of the following as: Asset, Liability, or Owner's Equity
a) Cash
b) Bank Loan
c) Capital
d) Accounts Receivable
a) Cash – Asset
b) Bank Loan – Liability
c) Capital – Owner's Equity
d) Accounts Receivable – Asset
What is the general format of a journal entry?
Date, Account Debited, Amount; then Account Credited, Amount
How would you classify the transaction? "Owner invests a laptop worth $1,200 and $3,000 cash into the business."
Dr Equipment $1,200
Dr Bank $3,000
Cr Capital $4,200
How would you classify this? "Owner contributes a vehicle valued at $12,000."
Dr: $12,000 (Vehicle)
Cr: $12,000 (Capital)
What country gifted the Statue of Liberty to the United States?
France
A business repays a $2,500 loan. What happens to liabilities and assets?
Dr: Liabilities ($2,500)
Cr: Assets ($2,500)
A business had assets of $20,000 and liabilities of $5,000. After a transaction, assets increased by $3,000 and liabilities by $1,000. What is the new owner’s equity?
Assets = $23,000
Liabilities = $6,000
Equity = $17,000
A business pays for insurance covering the next 12 months. Why is this not an expense yet?
It’s a prepaid asset until time passes.
How does a ledger help in preparing financial statements?
It shows totals for each account used to build statements.
How many species of Kiwi (bird) are there?
5