NJ CALA Finance Exam Question With 100% Correct Answers | Verified And Updated 2026 | Guaranteed Pass

NJ CALA Finance Exam Question With 100% Correct Answers | Verified And Updated 2026 | Guaranteed Pass Cash Basis Accounting - answer-Keeping records that shows only income actually received during a fiscal period and only expenses paid during a fiscal year. *Record income when cash or check is received *Record expense when check is written Accrual Basis Accounting - answer-Keeping records that show all income earned during a fiscal period even though it isn't received yet and all expenses incurred during a fiscal period even though the expenses are not yet paid *Record income when a bill is written *Record expense when an order is placed Double Entry Accounting - answer-Recording of a debit and credit for each transaction **Debits must always equal credits** Debits - answer-An entry made on the left side of the account Credits - answer-An entry made on the right side of the account Journals - answer-The organization's "books" where transactions are first recorded before posting to the general ledger.5 types of journals: -Cash receipt journal -Cash disbursement journal -Account receivable journal -Account payable journal -General journal (recording transactions that don't fit in to the above 4 categories) Posting - answer-The actual transcription of information from the journal into the general ledger. General Ledger - answer-Recording summary of all transactions posted from each journal. The general ledger maintains a separate record for each acct as listed in the chart of accounts. Chart of Accounts - answer-A systematic arrangement or listing of all general ledger accts by category with corresponding general ledger acct numbers. Assets are listed first, followed by liabilities, equity, revenue, and expense accts. Trial Balance - answer-Summary of balances from each acct in the chart of accts. These balances are the numbers from which you generate your balance sheet as well as your profit and loss statement. Balance Sheet - answer-A financial report that reflects what a business: Owns (an asset) Owes (a liability) Is worth (equity/capital/or net worth) Formula to Remember - answer-Assets= Liabilities + Equity Assets-Liabilities= Net WorthOperating Expenses - answer-resident care, plant operations, dietary, housekeeping, laundry, general & admin, depreciation, interest, total operating expenses Fixed Expense - answer-Expenses that do not change as occupancy goes up or down (mortgage, taxes etc) Variable Expense - answer-Expenses that change in direct proportion to occupancy (food, supplies, linens etc) Capital Expense - answer-Asset with a long life such as a building or equipment that has a useful life of more than a year and a value of at least $1,000. This item can depreciate over its life. The most common type of depreciation is "straight-line" depreciation. Straight-line Depreciation - answer-a method in which the same dollar amt of depreciation is allocated each of a depreciable assets life. Example: Cost of asset $3,000 divided by useful life of 15 years = $200/year straight line depreciation Capital Budget - answer-A 1 to 5 projection of the capital items you believe will be needed or replaced for the proper functioning of the business. (Will we need a new van? etc) Operating Budget - answer-A 1 year projection of what you believe will be the ongoing day to day expenses of the organization. (Salaries, raw food costs, etc)