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ACCT 110 > Chapter 2: Analyzing Transactions > Flashcards

Chapter 2: Analyzing Transactions Flashcards

1
Q

account

A

An accounting form that is used to record the increases and decreases in each financial statement item.

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2
Q

assets

A

The resources owned by a business that can provide the company with future benefits.

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3
Q

balance of the account

A

The amount of the difference between the debits and the credits that have been entered into an account.

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4
Q

capital account

A

In a proprietorship, the account that represents the owner’s equity.

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5
Q

chart of accounts

A

A list of the accounts in the ledger.

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6
Q

compound journal entry

A

A journal entry that has more than one debit entry or more than one credit entry.

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7
Q

correcting journal entries

A

Entries that are prepared when an error has already been journalized and posted.

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8
Q

credit

A

Amount entered on the right side of an account.

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9
Q

debit

A

Amount entered on the left side of an account.

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10
Q

double-entry accounting system

A

A system of accounting for recording transactions, based on recording increases and decreases in accounts so that debits equal credits.

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11
Q

drawings

A

The account used to record amounts withdrawn by an owner of a proprietorship. Also known as withdrawals.

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12
Q

expenses

A

Assets used up or services consumed in the process of generating revenues.

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13
Q

journal

A

The initial record in which the effects of a transaction are recorded.

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14
Q

journal entry

A

The for of recording a transaction in a journal.

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15
Q

journalizing

A

The process of recording a transaction in the journal.

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16
Q

ledger

A

A group of accounts for a business.

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17
Q

liabilities

A

The rights of creditors that represent debts of the business.

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18
Q

normal balance of an account

A

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.

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19
Q

owner’s equity

A

The owner’s right to the net assets of the business.

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20
Q

posting

A

The process of transferring the debits and credits from the journal entries to the accounts.

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21
Q

revenues

A

Increases in owner’s equity as a result of selling services or products to customers.

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22
Q

rules of debit and credit

A

In the double-entry accounting system, specific rules for recording debits and credits based on the type of account.

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23
Q

slide

A

An error in which the entire number is moved one or more spaces to the right or the left, such as writing $542.00 as $54.20 or $5,420.00.

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24
Q

T account

A

The simplest form of an account.

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25
Q

transposition

A

An error in which the order of the digits is exchanged, such as writing $542 as $452 or $524.

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26
Q

trial balance

A

A summary listing of the titles and balances of accounts in the ledger.

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27
Q

unadjusted trial balance

A

A summary listing of the titles and balances of accounts in the ledger prior to the posting of adjusting entries.

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28
Q

unearned revenue

A

The liability created by receiving cash in advance of earning the revenue.

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29
Q

withdrawals

A

The account used to record amounts withdrawn by an owner of a proprietorship. Also known as drawings.

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30
Q

What does this define?

An accounting form that is used to record the increases and decreases in each financial statement item.

A

account

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31
Q

What does this define?

The resources owned by a business that can provide the company with future benefits.

A

assets

32
Q

What does this define?

The amount of the difference between the debits and the credits that have been entered into an account.

A

balance of the account

33
Q

What does this define?

In a proprietorship, the account that represents the owner’s equity.

A

capital account

34
Q

What does this define?

A list of the accounts in the ledger.

A

chart of accounts

35
Q

What does this define?

A journal entry that has more than one debit entry or more than one credit entry.

A

compound journal entry

36
Q

What does this define?

Entries that are prepared when an error has already been journalized and posted.

A

correcting journal entries

37
Q

What does this define?

Amount entered on the right side of an account.

A

credit

38
Q

What does this define?

Amount entered on the left side of an account.

A

debit

39
Q

What does this define?

A system of accounting for recording transactions, based on recording increases and decreases in accounts so that debits equal credits.

A

double-entry accounting system

40
Q

What does this define?

The account used to record amounts withdrawn by an owner of a proprietorship. Also known as withdrawals.

A

drawings

41
Q

What does this define?

Assets used up or services consumed in the process of generating revenues.

A

expenses

42
Q

What does this define?

The initial record in which the effects of a transaction are recorded.

A

journal

43
Q

What does this define?

The for of recording a transaction in a journal.

A

journal entry

44
Q

What does this define?

The process of recording a transaction in the journal.

A

journalizing

45
Q

What does this define?

A group of accounts for a business.

A

ledger

46
Q

What does this define?

The rights of creditors that represent debts of the business.

A

liabilities

47
Q

What does this define?

Can be either a debit or a credit depending on whether increases in the account are recorded as debits or credits.

A

normal balance of an account

48
Q

What does this define?

The owner’s right to the net assets of the business.

A

owner’s equity

49
Q

What does this define?

The process of transferring the debits and credits from the journal entries to the accounts.

A

posting

50
Q

What does this define?

Increases in owner’s equity as a result of selling services or products to customers.

A

revenues

51
Q

What does this define?

In the double-entry accounting system, specific rules for recording debits and credits based on the type of account.

A

rules of debit and credit

52
Q

What does this define?

An error in which the entire number is moved one or more spaces to the right or the left, such as writing $542.00 as $54.20 or $5,420.00.

A

slide

53
Q

What does this define?

The simplest form of an account.

A

T account

54
Q

What does this define?

An error in which the order of the digits is exchanged, such as writing $542 as $452 or $524.

A

transposition

55
Q

What does this define?

A summary listing of the titles and balances of accounts in the ledger.

A

trial balance

56
Q

What does this define?

A summary listing of the titles and balances of accounts in the ledger prior to the posting of adjusting entries.

A

unadjusted trial balance

57
Q

What does this define?

The liability created by receiving cash in advance of earning the revenue.

A

unearned revenue

58
Q

What does this define?

The account used to record amounts withdrawn by an owner of a proprietorship. Also known as drawings.

A

withdrawals

59
Q

Debit or Credit - assets?

A

Debit account

60
Q

Debit or Credit - liabilities?

A

credit account

61
Q

Debit or Credit - owner’s capital?

A

credit account

62
Q

Debit or Credit - owner’s withdrawal?

A

debit account

63
Q

Debit or Credit - revenue accounts?

A

credit account

64
Q

Debit or Credit - expense account?

A

debit account

65
Q

Is an increase to an asset account a debit or credit?

A

debit

66
Q

Is an increase to an liability account a debit or credit?

A

credit

67
Q

Is an increase to an owner’s capital account a debit or credit?

A

credit

68
Q

Is an increase to an owner’s withdrawl account a debit or credit?

A

debit

69
Q

Is an increase to a revenue account a debit or credit?

A

credit

70
Q

Is an increase to a expense account a debit or credit?

A

debit

71
Q

Is a decrease to an asset account a debit or credit?

A

credit

72
Q

Is a decrease to an liability account a debit or credit?

A

debit

73
Q

Is a decrease to an owner’s capital account a debit or credit?

A

debit

74
Q

Is a decrease to an owner’s withdrawl account a debit or credit?

A

credit

75
Q

Is a decrease to a revenue account a debit or credit?

A

debit

76
Q

Is a decrease to a expense account a debit or credit?

A

credit

77
Q

What are the 10 steps in the accounting cycle?

A
  1. Source documents arrive
  2. Journal entries are recorded
  3. Transactions are posted to accounts
  4. Unadjusted trial balance is prepared
  5. Optional work sheet is prepared
  6. Adjusting entries are journalized and posted
  7. Adjusted trial balance is prepared
  8. Financial statements are prepared
  9. Closing entries are journalized and posted
  10. Post-closing trial balance is prepared

ACCT 110 (5 decks)

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