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
Process of recording transactions in a journal.
JOURNALIZING
A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
POSTING REFERENCE (PR) COLUMN
Process of transferring journal entry information tot he ledger; computerized systems automate this process.
POSTING.
Source of information for accounting entries that can be in either paper or electronic form.
SOURCE DOCUMENTS or BUSINESS PAPERS
Tool used to show the effects of transactions and events on individual accounts. Not a financial statement.
T-ACCOUNT
List of accounts and their balances at a point in time; total debit balances equal total credit balances.
TRIAL BALANCE
Liability created when customers pay in advance for products or services; earned when the products or services are later delivered.
UNEARNED REVENUE
Asset, liability or equity:
Cash Dividend
Identify the normal balance (Dr or Cr)
EQUITY
Dr
Asset, liability or equity:
Office Equipment
Identify the normal balance (Dr or Cr)
ASSET
Dr
Asset, liability or equity:
Accounts Payable
Identify the normal balance (Dr or Cr)
LIABILITY
Cr
Asset, liability or equity:
Cash
Identify the normal balance (Dr or Cr)
ASSET
Dr
Asset, liability or equity:
Utilities Expense
Identify the normal balance (Dr or Cr)
EQUITY
Dr
Asset, liability or equity: Office Supplies (bought in bulk)
Identify the normal balance (Dr or Cr)
ASSET
Dr
Asset, liability or equity:
Prepaid Rent
Identify the normal balance (Dr or Cr)
ASSET
Dr
Asset, liability or equity:
Unearned Fees
Identify the normal balance (Dr or Cr)
LIABILITY
Cr
Asset, liability or equity:
Service Fees Earned
Identify the normal balance (Dr or Cr)
EQUITY
Cr
Asset, liability or equity;
Common Stock
Identify the normal balance (Dr or Cr)
EQUITY
Cr
Balance sheet format where Assets are listed side-by-side with Liabilities.
ACCOUNT FORM
Balance sheet format where Assets are listed above Liabilities.
REPORT FORM
