Basic Accounting Terminologies

This means sorting of business transactions to their specific accounts.

• Classifying

• Recording

• Interpreting

• Summarizing

It is defined as the systematic and chronological recording of business transactions.

• Bookkeeping

• Financing

• Interpreting

• Planning

It is the language of business as it is communicating the financial statements to the users.

• Budgeting

• Accounting

• English language

• Bookkeeping

It means writing down of business transactions in the journals or in the official book of accounts.

• Recording

• Classifying

• Interpreting

• Summarizing

It is engaged in analyzing the financial statements.

• Recording

• Classifying

• Interpreting

• Summarizing

It is grouping of the entries recorded in the books of accounts and the preparation of financial statements.

• Recording

• Classifying

• Interpreting

• Summarizing

The first phase of accounting is bookkeeping.

• True

• False

Business transactions are everyday transactions that keep the business running, such as sales and purchases, rent for office space, and other expenses.

• True

• False

These are economic resources owned by the business expected for future gain.

• Liabilities

• Expenses

• Equity

• Assets

These includes debts, obligation to pay, and claims of the creditors on the assets of the business.

• Assets

• Expenses

• Owner's Equity

• Liabilities