C3: DEBITS & CREDITS Flashcards
The balance (debit or credit) that an account is normally expected to have.
Normal Balance
Assets, expenses, and losses normally have ___________.
Debit balances
Liabilities, shareholders’ equity, revenues, and gains normally have ___________.
Credit balances
What indicates how the account is increased in a journal entry?
The normal balance
What goes on each side of a T account?
Debits = Left
Credits = Right
What abbreviations are used for debits and credits?
DR and CR
To record an INCREASE in cash, we need to:
Debit the amount
Assets, expenses, and losses are usually ______ balances.
Debit
Credits ________ assets and __________ liabilities.
Decreases; Increases
Credits are normally on the _______ side of a T account.
Right
Liability (A/P), S/H Equity, and Revenues/Gains are usually _______ balances.
Credit
Expenses and Dividends Declared normally have a ______ balance.
DR
T/F: Revenue accounts have a debit balance.
False - CR balance
Balance is carried from one period to another if the account is ___________.
Permanent
Balance is transferred out of a temporary account at the __________________ to a permanent account.
End of the Period
Assets, liability, and S/H Equity are examples of:
Permanent Accounts
T/F: General journal summarizes info on each transaction.
False - detailed information but NOT a summary.
Information for each ACCOUNT is summarized in the _____________.
General Ledger
What are trial balances used to check?
If DR = CR
Which account is NOT involved in adjusting entries?
Cash accounts
When are adjusting entries made?
END of accounting period
What are the two types of adjusting entries?
Accruals and Deferrals
____________ required when revenue/expenses need to be recognized ________ cash is received/paid.
Accrual adjusting entry; BEFORE
_________ adjusting entry is required when revenue/expenses need to be recorded _______ cash is received/paid.
Deferral adjusting entry; AFTER
What is used to record reductions?
Contra-asset Account
Contra-asset whose normal balance is CR.
Accumulated depreciation account
What has full values of all company’s accounts receivable?
Carrying Amount
___________ = Assets cost
Carrying Amount
What are made at the END of the accounting period?
Closing Entries
To reset an account’s balance to zero, we must use ________.
Closing Entries
Revenue and Expense go into the ___________ account.
Income Summary
Income Summary and Dividends Declared go into the _________ account.
Retained Earnings
