Chapter 7 Vocab Flashcards
A place where the results of events affecting that item are recorded.
Account
The time period between financial statements.
Accounting cycle
A trial balance done after adjusting entries have been made and posted.
Adjusted trial balance
An internal entry made to adjust the accounts for internal events prior to preparing financial statements.
Adjusting entry
An event that management wants to plan and evaluate.
Business event
An organizational scheme used to classify accounts as assets, liabilities, or owners’ equity.
Chart of accounts
An entry made to close out a temporary account, transfer the balance to retained earnings, and determine income.
Closing entries
An account with an opposite balance to the normal balance of its associated account.
Contra account
The right side of an account.
Credit
The left side of an account.
Debit
An adjusting entry that occurs when expenses are incurred in one accounting period and payment is made in a later period.
Expense accrual
An adjusting entry that occurs when a company uses previously purchased assets in an attempt to generate revenue in future periods.
Expense deferral
The journal used to record both the account(s) to be debited and the account(s) to be credited.
General journal
A collection of specific asset, liability, and owners’ equity accounts.
General ledger
The recorded effect of an accounting event.
Journal entry
The process of recording a journal entry.
Journalizing
A ledger in a computer-based transaction system.
Master file
The side of an account is always the side (debit or credit) on which it increases.
Normal balance
An asset, liability, or owners’ equity account whose balance is carried over from year to year.
Permanent account
A trial balance prepared after the closing entries have been posted.
Post-closing trial balance
The process of recording the appropriate part of a journal entry to the affected account.
Posting
An adjusting entry that occurs when revenues are earned in one accounting period and payment is received in a later period.
Revenue accrual
An adjusting entry that occurs when a company has been paid in advance for services to be performed in a future period.
Revenue deferral
An informal representation of a general ledger account.
T-accounts
A journal in a computer-based transaction system.
Transaction files
A listing of all general ledger accounts and their respective balances to ensure that debits equal credits.
Trial balance
