Chapter 2 Flashcards
Record within an accounting system in which increases and decreases are entered & stored in a specific asset, liability, equity, revenue or expense.
ACCOUNT
Difference between total debits and total credits (including the beginning balance) for an account.
ACCOUNT BALANCE or BALANCE
Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
BALANCE COLUMN ACCOUNT
List of accounts used by a company; includes an identification number for each account.
CHART OF ACCOUNTS
Journal entry that affects at least three accounts.
COMPOUND JOURNAL ENTRY
Recorded on the right side; an entry that decreases asset and expense accounts, and increases liability, revenue, and most equity accounts; abbreviated Cr.
CREDIT
Individuals or organizations entitled to receive payments.
CREDITORS
Recorded on the left side; an entry that increases asset and expense accounts, and decreases liability, revenue, and most equity accounts; abbreviated Dr.
DEBIT
Individuals or organizations that owe money.
DEBTORS
Ratio of total liabilities to total assets; used to reflect risk associated with a company’s debts.
DEBT RATIO
= total liabilities / total assets
Corporation’s distributions of assets to its owners.
DIVIDENDS
Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
DOUBLE-ENTRY ACCOUNTING
All-purpose journal for recording debits and credits of transactions and events.
GENERAL JOURNAL
Record containing all accounts (with amounts) for a business.
LEDGER or GENERAL LEDGER or BOOK OF FINAL ENTRY
Record in which transactions are entered before they are posted to ledger accounts.
JOURNAL or BOOK OF ORIGINAL ENTRY
