Chapter 2 Terms Flashcards
Account
A record of increases and decreases in a specific asset, liability, or owner’s equity item
Accounting cycle
A series of steps followed by accountants in preparing financial statements
Chart of accounts
A list of accounts and the account numbers that identify where the accounts are in the ledger.
Compound entry
A journal entry that affects three or more accounts.
Credit
The right side of an account.
Debit
The left side of an account.
Double-entry accounting system
A system that records the dual (two-sided) effect of each transaction in appropriate accounts.
General journal
The most basic form of a journal in which transactions are recorded when they are not recorded in other specialized journals.
General ledger
A ledger that contains accounts for all assets, liabilities, equities, revenues, and expenses.
Journal
An accounting record where transactions are recorded in chronological (date) order. It shows the debit and credit effect of each transaction on specific accounts.
Journalizing
The entering of transaction data in the journal.
Ledger
A record that contains all of a company’s accounts. It keeps all the information about changes in each account in one place.
Posting
The procedure of transferring journal entries to the ledger accounts
Recording process
The first three steps of the accounting cycle.
T account
A form of account that looks like the letter T. It has the title above the horizontal line. Debits are shown to the left of the vertical line, credits to the right.
