Introduction to the accounting system

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Accounting system is a key part of the Free Bookkeeping Course 1 and Accounting Trainees and bookkeepers need to thoroughly understand it and define it.

You are part way through the FREE BOOKKEEPING COURSE 1 and you should have read the pages listed below before reading this page:

Free Bookkeeping Course 1

What is an accounting system?

Good question – what do we mean by an accounting system? Well, essentially most businesses buy and sell goods and/or services. Money comes in and money goes out. All the accounting system does is record this movement of money. A large building contractor may only issue one invoice a month for a substantial amount of money, whereas Amazon the online shopping company makes 12 sales a second and every sale needs an invoice!

So the accounting system used depends upon the nature of the business.

Remember this is only an introduction to the Accounting System.

You will learn a lot more about the accounting system as the course develops. But you should be aware that an accounting system is about recording data and producing information.
The textbook lists five stages to the accounting system. You will need to learn them:

Financial transaction
Financial documents
Books of prime entry
Ledger accounts
Trial balance

Don’t worry if you find these terms confusing, it is very early in the course and we will go into much more detail as the course progresses. By the time you get to the end of the course you will be using these terms like an old hand.

accounting system
Quick Question
Earlier we said the textbook lists five stages to the accounting system.
What is the third stage called?

Accounting is full of fancy terminology such as double-entry, assets and profits etc. Accounting is said to be the language of business, so I’m afraid you will have to learn these terms eventually  – but we will do it gradually over the duration of the course so don’t panic and enjoy the quiz below on the introduction to the accounting system.

If you haven’t already purchased the books here is the link to Amazon:

QUIZ: ACCOUNTING SYSTEM





You should have read this web page entitled "Introduction to the Accounting System" and Googled the various terms and printed examples of them out and put them in your study folder. You should have learnt all the definitions before taking this test.

 

Please attempt all questions.

 

When you have finished, click the submit button and you will then be taken to your results page.



Name


1
Goods and services can be sold for immediate payment, this is known as a credit sale?



2
Examples of financial transactions to be included in an accounting system, include the following:







3
An invoice is an example of a financial document.



4
The textbook states that there are five stages to an accounting system. What is the fifth stage ?



5
The place in the books of a business where a financial transaction is recorded for the first time is known as a book of



6
‘Total‘ accounts contained in the general ledger are known as



7
A customer who owes a business money is known as a



8
A supplier owed money by a business is known as a



9
A delivery van owned by a business is an example of an


10
Items owed by a business are called


11
The investment made in a business by the owner is called


12
A list of the balances of the ledger accounts drawn up in two columns,debit and credit, is known as a








Leaderboard for Introduction to the accounting system

1. Sana-36 Points
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4. Susan-36 Points
5. Kim F Davies-36 Points

 

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