Acc. Language Chapter 2

Question 1

account

Answer 1

An accounting form that is used to record the increases and decreases in each financial statement item

Question 2

assets

Answer 2

The resources owned by a business that can provide the com¬pany with future benefits

Question 3

balance of the account

Answer 3

The amount of the difference between the debits and the credits that have been entered into an account

Question 4

capital account

Answer 4

In a proprietorship, the account that represents the owner’s equity

Question 5

chart of accounts

Answer 5

A list of the accounts in the ledger

Question 6

correcting journal entries

Answer 6

Entries that are prepared when an error has already been journalized and posted.

Question 7

credit

Answer 7

Amount entered on the right side of an account

Question 8

debit

Answer 8

Amount entered on the left side of an account

Question 9

double-entry accounting system

Answer 9

A system of accounting for recording transactions, based on recording increases and decreases in accounts so that debits equal credits

Question 10

drawings\

Also known as withdrawals.

Answer 10

The account used to record amounts withdrawn by an owner of a proprietorship. (p. 48)

Question 11

expenses

Answer 11

Assets used up or services consumed in the process of generating revenues.

Question 12

Unadjusted trial balance

Answer 12

A summary listing of the titles and balances of the accounts in the ledger prior to the posting of adjusting entries

Question 13

Unearned revenue

Answer 13

The liabilities credited by receiving cash in advance of earning the revenue