Chapter 2

Question 1

account

Answer 1

A record that is kept for each asset, liability, equity, revenue, expense, and dividend component of an entity.

Question 2

chart of accounts

Answer 2

A listing of the accounts of an entity, along with any identification coding.

Question 3

control account

Answer 3

The total of all subcomponent account records for an account; e.g., the sum of all individual accounts receivable.

Question 4

credit

Answer 4

The nature of an action to an account to indicate an increase (liabilities, equity, and revenue) or decrease (assets, expenses, and dividends); usually right-justified in an entry.

Question 5

debit

Answer 5

The nature of an action to an account to indicate an increase (assets, expenses, and dividends) or decrease (liabilities, equity, and revenue); usually left-justified in an entry.

Question 6

general ledger

Answer 6

A record of the accounts comprising financial statements, and their respective balances.

Question 7

journal

Answer 7

A chronological listing of the transactions and events of an organization, in debit/credit format.

Question 8

journalizing

Answer 8

The process of recording transactions and events into the Journal.

Question 9

posting

Answer 9

The process of transferring journal entry effects into the respective general ledger accounts.

Question 10

source document

Answer 10

A document evidencing a transaction or event and potentially providing for the initiation of a journal entry.

Question 11

subsidiary account

Answer 11

A subcomponent account record providing individual balance details; e.g., the record for one customer out of a group of customers comprising all accounts receivable.

Question 12

T-account

Answer 12

An abstract representation of an account, with the left side of the “T” representing debits and the right side credits.

Question 13

trial balance

Answer 13

A listing of account balances from the ledger, used to test the equality of debits and credits.