Accounting Basics

What is the basic accounting equation?

• Assets + Assets = Capital

• Liabilities = Assets + Capital

• Assets = Liabilities + Capital

Which of the following isn't a book of original entry?

• Cash Book

• Sales Day Book

• Weekday Book

• Returns In Day Book

Returns Out is best defined as:

• When goods are returned by the supplier.

• When goods are returned by the customer to the business

• When goods are thrown away

• When goods are returned by the business to the supplier.

A bank reconciliation statement ensures that:

• The cash book is current.

• The bank statement is current.

• The cash book and bank statement amounts match.

A fixed account is also known as a:

• Locked account

• Timed Amount

• Super Savings Account

• Demand deposit account

The highest expense a firm would incur is typically:

• Payroll

• Postage

• Sundry

• Petrol

The credit side is also know as the:

• Left hand side

• Right hand side

• Middle side

• Corner side

Drawings is a situation where

• Money is added to the company's purse.

• Money is taken out of the company.

• Money is taken out for one's personal use.

Which of the following isn't ethical accounting behavior.

• Updating books in a timely manner.

• Not engaging in insider trading.

• Revealing company financials to your friends.

• Reporting any suspicious transactions to management.

Debtors are persons

• That we owe money to

• Who owe us money

• that are given donations by the government

• that have unlimited liability