Record accounting entries for financial operations, buying and selling merchandise and fixed assets
Answers
Explanation:
Answer:
Question 1
Define basic accounting terms.
Answer: Basic accounting terms refers to the accounting terms that are used daily in the world of business.
Question 2
Give three examples of revenues.
Answer: The three examples of revenues are
(i) Amount received from the sale of goods
(ii) Amount received from providing service to customers
(iii) Receipts of commission, interest, rent, etc.
Question 3
Distinguish between profit and gain
Answer: Profit is the excess of revenues over expenses during an accounting period. It is the result of business transactions which are of regular nature whereas gain arises from events or transactions which are incidental to business such as a sale of a fixed asset or winning a lottery prize.
Question 4
Distinguish between fixed assets and current assets
Answer: Fixed assets refer to those assets which are held for continued use in the business and are not meant for resale whereas current assets are either meant for sale or which are expected to be converted into cash within one year.
Question 5
Distinguish between revenue expenditure and capital expenditure
Answer: If the benefit of an expenditure is exhausted within a year, it is treated as revenue expenditure (also called expense). On the other hand, if the benefit of expenditure lasts for more than a year it is treated as capita;l expenditure (also called an asset).
Question 6
Distinguish between expense and expenditure
Answer: Expense is the cost incurred in producing and selling goods and services. Thus, it includes the cost of goods sold and the amount paid for salaries, rent, commission, etc. On the other hand, expenditure is a wider term which includes expense also. Expenditure is the amount spent on acquiring assets, goods, and services.
Answer:
Explanation:Answer:Question 1Define basic accounting terms.Answer: Basic accounting terms refers to the accounting terms that are used daily in the ... More