Chapter 7 Vocab

Question 1

A place where the results of events affecting that item are recorded.

Answer 1

Account

Question 2

The time period between financial statements.

Answer 2

Accounting cycle

Question 3

A trial balance done after adjusting entries have been made and posted.

Answer 3

Adjusted trial balance

Question 4

An internal entry made to adjust the accounts for internal events prior to preparing financial statements.

Answer 4

Adjusting entry

Question 5

An event that management wants to plan and evaluate.

Answer 5

Business event

Question 6

An organizational scheme used to classify accounts as assets, liabilities, or owners’ equity.

Answer 6

Chart of accounts

Question 7

An entry made to close out a temporary account, transfer the balance to retained earnings, and determine income.

Answer 7

Closing entries

Question 8

An account with an opposite balance to the normal balance of its associated account.

Answer 8

Contra account

Question 9

The right side of an account.

Answer 9

Credit

Question 10

The left side of an account.

Answer 10

Debit

Question 11

An adjusting entry that occurs when expenses are incurred in one accounting period and payment is made in a later period.

Answer 11

Expense accrual

Question 12

An adjusting entry that occurs when a company uses previously purchased assets in an attempt to generate revenue in future periods.

Answer 12

Expense deferral

Question 13

The journal used to record both the account(s) to be debited and the account(s) to be credited.

Answer 13

General journal

Question 14

A collection of specific asset, liability, and owners’ equity accounts.

Answer 14

General ledger

Question 15

The recorded effect of an accounting event.

Answer 15

Journal entry

Question 16

The process of recording a journal entry.

Answer 16

Journalizing

Question 17

A ledger in a computer-based transaction system.

Answer 17

Master file

Question 18

The side of an account is always the side (debit or credit) on which it increases.

Answer 18

Normal balance

Question 19

An asset, liability, or owners’ equity account whose balance is carried over from year to year.

Answer 19

Permanent account

Question 20

A trial balance prepared after the closing entries have been posted.

Answer 20

Post-closing trial balance

Question 21

The process of recording the appropriate part of a journal entry to the affected account.

Answer 21

Posting

Question 22

An adjusting entry that occurs when revenues are earned in one accounting period and payment is received in a later period.

Answer 22

Revenue accrual

Question 23

An adjusting entry that occurs when a company has been paid in advance for services to be performed in a future period.

Answer 23

Revenue deferral

Question 24

An informal representation of a general ledger account.

Answer 24

T-accounts

Question 25

A journal in a computer-based transaction system.

Answer 25

Transaction files

Question 26

A listing of all general ledger accounts and their respective balances to ensure that debits equal credits.

Answer 26

Trial balance