Sorting Transactions
Is it revenue, an expense, an asset, a loan, or the owner's money?
In your head, jot if needed · no calculator why?
Opens at level 7.
Lesson and untimed practice
Read the full lesson and try each skill without a clock. About 3 minutes to read.
skills · practice stats
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Pick the category not tried yet
worked example
The owner deposits $3,900 of their own money into the business account as an investment. How should the bookkeeper classify it?
- Owner's draw
- Loan (liability)
- Owner's contribution
- Revenue
Answer: Owner's contribution
- The owner's own money put into the business is a contribution to equity, not revenue or a loan.
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Which payments are expenses? not tried yet
worked example
This month the business paid: $515 for this month's utilities, a $1,185 owner's draw, and a $2,695 laptop recorded as an asset. How much of this is expense this month?
Answer: $515.00
- Only one item is used up this month, so expense is $515.
- Not expenses: the owner's draw reduces equity and the laptop is an asset.
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Which receipts are revenue? not tried yet
worked example
This month the business received: a $3,350 deposit for work you'll do next month, $5,600 from the owner, $400 of card payments for services delivered this month, and $850 from a customer paying last month's invoice. How much of this is revenue earned this month?
Answer: $400.00
- Only one item was earned this month, so revenue is $400.
- Not revenue: a deposit is work you still owe, owner money isn't earned, and last month's invoice was counted as revenue last month.
rest ladder
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