Free TESDA Bookkeeping NC III Exam Flashcards

Select an appropriate communication method, share accurate process information, lead discussion, and identify and communicate workplace issues. For a small team, assign responsibilities according to competence, state performance expectations, monitor results, and address concerns or feedback.

For negotiation, gather relevant information, clarify needs and objectives, participate constructively, and document agreed areas. For a work problem, define the variance, identify its extent and root cause, evaluate possible solutions, act within authority, and retain evidence instead of forcing an unexplained balance.

Identify the problem, select and apply the appropriate mathematical technique, and analyze the result for reasonableness. Select technology suited to the task, validate inputs and output, protect access and the audit trail, maintain the system, and reconcile results to source evidence.

Protect confidentiality, use accurate and neutral language, clarify the requested information, meet agreed response times, and distinguish verified facts from unresolved items. Credibility depends on both accuracy and conduct.

List the required outputs, identify dependencies and risk, set priorities and milestones, monitor progress, and seek guidance before a deadline is endangered. A work plan should make ownership and completion status visible.

Check the work against the required format and policy, reconcile key totals, verify supporting evidence, correct defects, and record any review. Quality control asks whether the output is complete, accurate, timely, and fit for the client's need.

Use authorized access, accurate master data, validated entries, controlled file transfer, clear filenames and periods, regular backups, and review of generated reports. Preserve source records so computer output can be traced and checked.

It provides a consistent list and coding structure for asset, liability, equity, income, and expense accounts. It should reflect the nature of the business and allow transactions to be classified consistently.

Assets = Liabilities + Equity. Every journal entry must preserve this equality through equal total debits and credits, even when the transaction affects more than two accounts.

Assets, expenses, and drawings normally carry debit balances. Liabilities, equity, and income normally carry credit balances. Contra accounts normally carry the opposite balance of the account they offset.

Verify authenticity, date, parties, authorization, amount, arithmetic, tax or other required detail, business purpose, and whether the transaction has already been recorded. An unsupported or duplicate document should be resolved first.

Debit Cash and credit Sales or Service Income for the amount earned. If the transaction also requires recognition of cost of goods sold under the applicable inventory system, record that separate effect as well.

Debit Supplies, or the applicable supplies expense under the entity's policy, and credit Accounts Payable. The entry recognizes the resource or expense and the obligation to the supplier.

Debit Cash and credit Accounts Receivable. Do not credit revenue again: the revenue was recognized when the receivable was created.

It recognizes an expense already incurred and the related liability even though cash has not yet been paid. The usual entry debits the appropriate expense and credits an accrued liability.

The explanation states the transaction's nature, while the reference links the entry to supporting evidence and later postings. Together they create an audit trail and make review or correction more reliable.

A journal records transactions chronologically. A ledger groups posted effects by account so the activity and balance of Cash, Accounts Receivable, Sales, and other accounts can be summarized.

Preserve the transaction date, amount, debit or credit side, description or reference, and the cross-reference between journal and ledger. Post in chronological order and verify that every line is transferred once.

Total each side and subtract the smaller total from the larger. The balance lies on the side with the greater total; its direction should then be checked against the account's expected normal balance.

The control account shows the aggregate balance in the general ledger, while the subsidiary ledger shows the individual customer, supplier, asset, or payroll details. Their totals should reconcile.

Add the individual customer balances in the accounts receivable subsidiary ledger and compare the total with the general-ledger control account. Investigate differences such as omitted, duplicate, or misdirected postings.

The adjusted trial balance must contain the updated ledger balances. If an adjusting entry remains only in the journal, the related asset, liability, income, or expense balance will still be misstated.

Closing entries reduce temporary income, expense, and drawing or distribution accounts to zero and transfer the period's net effect to the appropriate equity account. Permanent accounts remain open.

Trace the source and original entry, determine the exact wrong and correct effects, use the authorized correction method, and retain a clear audit trail. Never erase evidence or add an unexplained plug.

It lists ledger account balances and tests whether total debits equal total credits at a point in the accounting cycle. Agreement is useful evidence of arithmetic balance, but it does not prove that every transaction is correct.

List accounts in chart-of-accounts order, transfer each ending balance to the correct debit or credit column, total both columns, and investigate any difference before proceeding.

It is the list of ledger balances before period-end adjusting entries. It is the starting point for identifying accruals, deferrals, depreciation, and other required adjustments.

It is prepared after all adjusting entries have been journalized and posted. Its updated balances are the basis for preparing the period's financial statements.

Only permanent balance-sheet accounts with ending balances belong on it. Temporary income, expense, and drawing or distribution accounts should be zero after closing.

Re-add both columns, verify every ledger balance was copied once and to the correct side, and trace recent postings. A difference divisible by nine can suggest transposed or shifted digits, but it is only a clue.

Yes. It can still agree if a transaction was omitted, both sides used the wrong accounts, equal debit and credit amounts were wrong, or offsetting errors occurred. Agreement is not proof of proper classification or completeness.

An unexpected credit in an asset or expense account, or an unexpected debit in a liability, equity, or income account, may signal an error, overdrawn position, or legitimate exception that needs evidence and explanation.

A worksheet organizes trial-balance amounts, adjustments, and statement classifications to support preparation and review. It is an internal working paper, not a substitute for journalizing and posting required adjustments.

It reports income and expenses for a period and derives profit or loss. It measures performance over time, unlike a statement of financial position, which reports balances at a date.

It reconciles opening equity to closing equity through owner contributions, profit or loss, drawings or distributions, and any other applicable equity movements for the period.

It presents assets, liabilities, and equity at a specific date. The report must satisfy Assets = Liabilities + Equity and use amounts supported by the adjusted ledger.

Operating activities relate mainly to ordinary revenue-producing operations, investing activities to long-term assets and investments, and financing activities to borrowings and owner financing.

Accrual accounting recognizes income when earned and expenses when incurred, not simply when cash moves. Credit sales, unpaid expenses, prepayments, depreciation, and working-capital changes can create the difference.

Profit or loss affects equity; closing equity appears in the statement of financial position; and the cash-flow statement explains the movement between opening and closing cash. The same underlying ledger must support all reports.

Current ratio = Current Assets ÷ Current Liabilities. It is a liquidity indicator, but a meaningful conclusion also considers asset quality, timing, industry, seasonality, and comparison periods.

Gross profit is sales less cost of goods sold. Gross margin percentage is gross profit divided by sales. Changes may reflect pricing, sales mix, purchase cost, inventory errors, or shrinkage and should be investigated in context.

State the period and source data, compare relevant amounts or ratios, explain material movements without overstating causation, identify limitations, and recommend specific follow-up supported by evidence.

It provides reasonable assurance over reliable reporting, effective operations, compliance, and protection of assets. It reduces risk but cannot guarantee that every error, fraud, or override will be prevented.

Authorization, custody of assets, recordkeeping, and independent reconciliation should be separated where practical. One person should not be able to initiate, conceal, and approve the same improper transaction.

Sequence control helps identify missing, duplicate, or unrecorded invoices, receipts, or vouchers. The sequence must actually be accounted for; prenumbering alone is not an effective review.

Issue controlled receipts, record collections promptly, restrict access, deposit intact and promptly, separate handling from posting where practical, and have an independent person reconcile collections, deposits, and bank activity.

Require approved support, separate authorization from payment and recording, control access to payment instruments, prevent duplicate payment, and independently review the bank statement and reconciliation.

Outstanding checks and deposits in transit normally adjust the bank side because the entity recorded them first. Bank charges, direct collections, and book errors normally require book-side updates and journal entries after verification.

The fund has a fixed authorized amount, disbursements require approved vouchers and evidence, access is restricted, and replenishment records the supported expenses. Cash plus valid vouchers should equal the authorized fund before replenishment.

Identify the policy and period reviewed, describe the evidence and test performed, state compliant and noncompliant findings, explain risk, recommend corrective action, obtain management validation, and file the report for future reference.