Accounting Terms Test 1

1. Define the following terms:

a) Accounting________is_using_bookkeping_records_to_prepare_financial_._____
sstatements_.______________________________________________________
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b) Bookkeeping_______is_the_recording_of_all_financial_transactions_of_a______
business_._________________________________________________________
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c) Transaction___is_the_exchange_of_goods_for_money_.____________________
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d) Trading______is_the_buying_and_selling_of_goods_.______________________
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e) Inventory_____is_goods_available_for_resale_.___________________________
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f) Purchases_______is_buying__of_goods_on_sale.__________________________
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g) Sales____is_the_selling_of_goods_for_resale_.___________________________
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h) Trade Receivables
_represents_the_amount_owed_to_the_business_by_its_customers_.________
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i) Trade Payables
this_represents_the_amount_owed_to_the_business_by_its_suppliers_.______
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2. Define the following terms and give two (2) examples of each:
a) Assets__represent_any_resources_owed_to_the_business_.inventory_and_____
buildings_._________________________________________________________
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b) Liabilities___represent_any_resourcse_owned_by_the_business_.____________
bankoverdraft_and_tradepayables._____________________________________
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c) Capital___total_resources_provided_by_the_owner_of_the_business.________
__machinery_and_equipment._________________________________________
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d) Drawings______represent_any_resource_taken_from_the_owner_of_the_____
_business_.money_and_inventory_.____________________________________
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e) Income_______the_gain_made_by_the_business_during_day_to_day_________
running_of_business______sales_and_commision_earned.__________________
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f) Expenses_______the_loses_made_during_day_to_day_running_of_the_busines
s_insurance_and_salaries_____________________________________________
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[25 Marks]