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acc > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

General Ledger

A

Collection of all accounts with their activity and balances that exist in a business

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2
Q

A journal

A

A book of original entry that includes a chronological record of all transactions that have occurred within a business during a period occured

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3
Q

A trial balance

A

a list of all ledger accounts which exist in a business and includes an identification number assigned to each account
tool to check equality of debits and credits in ledger

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4
Q

Which accounts would have a normal debit balance?

A

Expenses
Dividends
Cash

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5
Q

Debits go on the

A

Left

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6
Q

Credits go on the

A

right

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7
Q

3 steps of preparing trial balance

A
  1. list each acc. title and its amount (from the ledger) in the trial balance
  2. Compute the total of debit balances and the total of credit balances
  3. Verify total debit balances= total credit balances
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8
Q

Acc. that would have a normal credit balance

A

common stock
acc. payable
revenues
unearned revenues

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9
Q

If investing $ into business for common stock, in a T-acc

A

debit cash
credit common stock

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10
Q

Acc. that have a normal debit balance?

A

Expenses
Dividends
Cash

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11
Q

Formula for debt ratio

A

debt ratio= total liabilities/total assets

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12
Q

Which financial statements report the financial position of a business over a period of time?

A

statement of returned earnings
statement of cash floes
income statement

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13
Q

A report period…

A

Common types:
Annual (aka accounting/fiscal year)
Semiannual
Quarterly
Monthly period

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14
Q

A business whose acc year begins on Jan 1 and ends Dec 31 are called

A

calendar year companies

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15
Q

Debt ratio is

A

debt ratio= total liabilities/total assets

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16
Q

What does debit mean in acc?

A

An entry recorded for a payment made or owed

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17
Q

What does credit mean in acc?

A

An entry that records a decrease in assets or an increase in liability as well as a decrease in expenses or an increase in revenue

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18
Q

Equation for ending cash balance

A

beginning cash balance+ debits - credits= ending cash balance

19
Q

Equation for ending acc receivable balance

A

beg. acc receivable bal + credit sales(debits)- cusomer payments (credits)= ending acc receivable

20
Q

What’s the formula for acc receivable balance

A

beg. acc receivable bal. + services on acc- collections from customers= end. acc. receivable bal.

21
Q

What’s the equation for Ending Acc. payable balance

A

Beg. acc. payable bal. + purchases on acc.- payments on acc.= end. acc. payable balance

22
Q

ending total equity equation

A

beg. total equity+ revenues-expenses= ending total equity

23
Q

Change in equity equation

A

beg. total equity- ending total equity = change in equity

24
Q

net income equation

A

net income= total revenues- total expenses

25
Q

What makes up total assets?

A

total assets= cash+ acc. receivable+ equipment

26
Q

What accounts are an asset?

A

Notes Receivable
Land
Cash
Prepaid Insurance
Accounts Receivable
Supplies
Equipment

27
Q

What accounts are a liability?

A

Unearned revenue
Notes payable

28
Q

What accounts are expenses?

A

Legal expense

29
Q

What accounts are revenue?

A

Tour service revenue
Services revenue

30
Q

What are the types of accounts?

A

Asset
Expense
Revenue
Liability
Equity

31
Q

What doe normal balance mean?

A
32
Q

Accounts with a “debit” normal balance

A

assets + expenses

33
Q

Acc. w “credit” normal balance`

A

Revenue + liability

34
Q

Expenses always decrease equity so they are always

A

DEBITS

35
Q

Examples of assets are

A

Cash
Acc. Receivable
Office Supplies
Office Equipment
Land

36
Q

DO assets belong in an income statement?

A

No, they belong in the balance sheet

37
Q

Acc. payable is a

A

Liability

38
Q

Acc. payable belongs on the income statement (T/F?)

A

FALSE,
it belongs on the balance sheet

39
Q

Common stock is an equity acc. and is reported on the

A

BALANCE SHEET

40
Q

Dividends are reported on

A

the statement of retained earnings

41
Q

Retained earnings represent

A

cumulative revenues
less: cumulative expenses
less: cumulative dividends

42
Q

The statement of retained earnings reports…

A

the change in the retained earnings balance from the beginning of the period to the end of the period.

43
Q

The balance sheet represents…

A

The acc. equation

acc (13 decks)

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