Chapter - 3 The Accounting Information System Flashcards
What is the double entry accounting system?
This is a system in accounting that reflects the two sided effect of every transaction
What is an event?
A source of or cause of changes in an asset, liability, and equity.
What is a transaction?
An external event involving a transfer or exchange betweeen two or more entities
What is an account?
A ststematic arrangement that shows the effect of transactions and other events ona specific element.
What are real accounts?
Asset
Liability
Equity
(These are never closed)
What are nominal accounts?
Nominal accounts are revenue
expenses
dividends
These are closed periodically
What is the ledger?
A book containig accounts
What is a general ledger?
A collection of all asset, liability, and stockholders’ equity , revenue, and expense accounts
What is a subsidiary ledger
A book containng the details related to a given general ledger account
What is posting?
The process of transferring the esential facts and figures from the book of orginal entry to the ledger accounts
Trial balance?
The list of all open acccounts in the ledger and their balances.
What are prepaid expenses?
Expenses paid in cash before they are used or performed
What are unearned revenues?
Cash received before services are perfomred
What are accrued revenues?
Revenues for services performed but not yet received in cash or recorded
What are accrued expenses?
Expenses incurred but not yet paid in cash or recorded
