Accounting Process: Chapter 5 Flashcards
It is a series of steps taken in gathering, processing, and summarizing data so as to produce meaningful information which are communicated to statement users by way of financial reports.
Accounting Cycle
It is the book of original entry.
General Journal
It is the book of final entry.
General Ledger
It is issued when service or merchandise is given to a customer or client.
Invoice
It is used when cash is received by the entity.
Official Receipt
It is a document used when cash is paid or a check is issued.
Cash or Check Voucher
It is a negotiable instrument used as a substitute for cash, the payment for which is drawn against the entity’s or individual’s current account.
Check
It is a written promise to pay a certain sum of money at a future date.
Promissory Note
It is a bill presented to a customer for service rendered or merchandise given for which payment is demandable.
Statement of Account
It is a device used to record the increases and decreases affecting each of the different assets, liabilities, and owner’s equity.
Account
It is a listing of account titles which guides the bookkeeper in the recording of transactions.
Chart of Accounts
It is the simplest tool used to analyze the effects of the transactions on each account.
T account
It is the left side of an account.
Debit
It is the right side of an account.
Credit
This states that the transactions must always affect two accounts and at least two accounting elements.
Double Entry Bookkeeping System or Venetian Model
It is the difference between the debit total and the credit total.
Account Balance
If the debit total is higher than the credit total, the account balance is called a _________.
Debit Balance
If the credit total is higher than the debit total, the account balance is called a _________.
Credit Balance
When the debit total is equal to the credit total, it is a ____________.
Zero Account Balance
It is the process of recording in a general journal.
Journalization
Every entry made in the general journal is called a _________.
Journal Entry
A journal entry with one debit and one credit is called a ________________.
Simple Journal Entry
When an entry has more than one debit or more than one credit, it is called a __________.
Compound Journal Entry
It provides a complete recording of a transaction in chronological order.
Journal
It shows in one page all the changes (increases or decreases) that took place for a particular account.
Ledger
It is the process of transferring the debits and credits from the journal to the ledger.
Posting
It facilitates the tracing of an entry to and from the journal and ledger.
Cross Reference
It is a list of accounts with ledger balances.
Trial Balance
Errors: A difference of ___ would indicate probably an error in addition.
Ten
Errors: If the difference is divisible by ___, then the error probably is in posting to the wrong side.
Two
Errors: the order of the digits are interchanged.
Transposition
Errors: the decimal point is misplaced.
Transplacement
The accounts receivable and accounts payable in the general ledger are called ________________.
Control Accounts
An individual record is kept for each customers or creditors called ___________ or customer’s card and creditor’s card, where the details of their accounts are entered.
Subsidiary Ledger
