Chapter 2 Flashcards
An accounting form that is used to record the increases and decreases in each financial statement item.
Account
A claim against the customer created by selling merchandise or services on credit.
Account Receivable
The resources owned by a business.
Assets
The amount of the difference between the debits and the credits that have been entered into an account.
Balance of the Account
An account used for a proprietorship that represents the owner’s equity.
Capital Account
A list of the accounts in the ledger.
Chart of Accounts
An entry that is prepared when an error has already been journalized and posted.
Correcting Journal Entry
Amounts entered on the right side of an account.
Credits
Amounts entered on the left side of an account.
Debits
A system of accounting for recording transactions, based on r_ecording increases and decreases in accounts_ so that debits equal credits.
Double-Entry Accounting System
The account used to record amounts withdrawn by an owner of a proprietorship.
Drawing
Assets used up or services consumed in the process of generating revenues.
Expenses
Financial analysis that compares an item in a current statement with the same item in prior statements.
Horizontal Analysis
The intial record in which the effects of a transaction are recorded.
Journal
The form of recording a transaction in a journal.
Journal Entry
The process of recording a transaction in the journal.
Journalizing
A group of accounts for a business.
Ledger
The rights of creditors that represent debts of the business.
Liabilities
The normal balance of an account can be either a debit or a credit depending on whether increases in the account are recorded as debits or credits.
Normal balance of an account
The owner’s right to the assets of the business.
Owner’s Equity
The process of transferring the debits and credits from the j_ournal entries to the accounts_.
Posting
Increases in owner’s equity as a result of selling services or products to customers.
Revenues
In the double-entry accoutning system, specific rules for recording debits and credits based on the type of account.
Rules of Debit and Credit
An error in which the entire number is moved one or more spances to the left or the right, such as writing $542.00 as $54.20 or $5,420.00.
Slide
The simplest form of an account.
T Account
An error in which the order of the digits is changed, such as writing $542 as $452 or $524.
Transposition
A summary listing of the titles and balances of accounts in the ledger.
Trial Balance
A summary listing of the _titles and balances of account_s in the ledger prior to the posting of adjusting entries.
Adjusted Trial Balance
A summary listing of the titles and balances of accounts in the ledger prior to the posting of adjusting entries.
Unadjusted Trial Balance
The liability created by receiving revenue in advance.
Unearned Revenue
