Accounting Basics Flashcards
To ensure students understand the fundamentals of accounting which governs how bookkeepers record transactions.
What Is Accounting?
Accounting is the language of business and includes the analyzing and recording of all transactions.
The listing of all of the accounts available for use in a company’s accounting system is known as the __________
.
Chart of Accounts
Obligations (amounts owed) are reported on the balance sheet and are referred to as __________
.
Liabilities
What is Revenue?
Revenue sometimes referred to as income represents the amount of monies earned for the period and is generally derived from the sale of goods and/or services
Accounting entries involve a minimum of how many accounts?
Two
Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on the balance sheet and are referred to as __________
.
Assets
What is an expense?
An expense is a cost that occurs as part of a company’s operating activities during a specified accounting period.
In plain terms, think of the common phrase “You have to spend money to make money.” Therefore, the company must take on certain necessary expenses to generate revenue.
What are assets?
An asset is anything a company owns that has future value or a resource of value that can be converted into cash.
Which term is associated with the ‘left-side’ of the ledger?
Debit (DR.)
To debit an account means placing the dollar value to the left side of that account ledger.
Which term is associated with ‘right-side of the ledger?
Credit (CR.)
To debit an account means placing the dollar value to the right side of that account ledger.
When cash is received, the Cash account will be
Debited (DR.) Increase to Cash account is reflected with a debit to the account.
When a company pays a bill, the Cash account will be
Credited (CR.) Decrease yourself, get your mind back and then try again. to Cash account is reflected with a debit to the account.
