Accounting Fundamentals and the Bookkeeping Cycle
What this domain tests
Nissho Bookkeeping Grade 3 asks you to move a sole proprietorship through the full cycle: identify accounts, write 仕訳, post to 総勘定元帳, prove a 試算表, make 決算整理, and close the books. The exam rewards clean debit-credit logic, not memorized forms.
Core rules
- 資産 = 負債 + 純資産. Increases in assets and expenses are debits; increases in liabilities, equity, and revenues are credits. Decreases are the opposite.
- A journal entry needs the date, debit account, credit account, amount, and a short description. Posting copies each side to its ledger account.
- A trial balance lists every account balance; total debits must equal total credits. It catches one-sided postings and addition errors, but not a completely omitted transaction or a wrong account used on both sides.
- Closing entries empty temporary accounts: revenues and expenses go to 損益; the net profit or loss goes to 資本金; 引出金 is closed to 資本金.
Worked example
Owner invests ¥800,000 cash: 現金 800,000 / 資本金 800,000. Buys equipment for ¥300,000 cash: 備品 300,000 / 現金 300,000. Earns ¥200,000 cash revenue: 現金 200,000 / 売上 200,000. Pays ¥50,000 rent: 地代家賃 50,000 / 現金 50,000. The trial balance shows cash ¥650,000, equipment ¥300,000, rent ¥50,000, capital ¥800,000, sales ¥200,000; both totals are ¥1,000,000. Closing: 売上 200,000 / 損益 200,000; 損益 50,000 / 地代家賃 50,000; 損益 150,000 / 資本金 150,000. The last entry records profit as an increase in equity.
Traps that cost marks
- Treating 引出金 as an expense, or closing it to 損益 instead of 資本金.
- Forgetting that 売上 and 仕入 are temporary accounts that must end at zero.
- Assuming a balanced trial balance proves the ledger is correct.
- Mixing tax-inclusive and tax-exclusive recording without instruction.