DOUBLE ENTRY RECORING PART 1

For SP. Owner is PERSONALLY LIABLE for business debts.

• True

• False

When doing ACCOUNTING for the BUSINESS, business = owner

• True

• False

BUSINESS activities are SEPARATE from OWNER activities. All transactions are recoded from the business viewpoint.

• Going concern

• Accounting entity

The owner used his own own money to buy a gift for his wife. This should be recorded in the BUSINESS' books.

• Correct

• Wrong

Owner put in his own cash $50000 into the business. This should be recoded in the BUSINESS' books.

• Correct

• Wrong

NOT an ASSET.

• motor vehicle

• fixtures and fittings

• cash in hand

• loan

NOT an EXPENSE.

• advertising expense

• rental expense

• rental income

• salaries

Liabilities = obligations _____ by a business to others that are expected to be settled in the future.

• OWNED

• OWED

Resources a business OWNS or CONTROLs that are expected to bring future benefits.

• ASSETS

• EXPENSES

• LIABILITIES

• INCOME

Resources CONTRIBUTED by OWNER for BUSINESS USE =

• expense

• capital

• drawings

• profit