Chapter 2 Vocab

Question 1

Left side

Answer 1

Debit

Question 2

Right side

Answer 2

Credit

Question 3

Rules of double-entry accounting

Answer 3

1. Every transaction affects at least two accounts

2. Total debits must equal total credits

Question 4

Accounting cycle

Answer 4

1. Analyze business transactions from source documents
2. Record the transactions by entering them in the general journal
3. Post the journal entries to the ledger and prepare a trial balance
4. Adjust the accounts and prepare an adjusted trial balance
5. Prepare the financial statements
6. Close the accounts and prepare a post closing trial balance

Question 5

Source documents

Answer 5

Invoices, receipts, checks, contracts

Question 6

Double-Entry System

Answer 6

Each transaction must be recorded with at least one debit and one credit and the total amount of the debits must equal the total amount of the credits