Exam 2: Modules 3-5 Flashcards
an instance of buying or selling something
transaction
what is the basic accounting equation?
assets = liabilities + owner’s equity
what is the expanded accounting equation?
assets = liabilities + capital + revenue - expenses - withdraws
what is the acronym for the expanded accounting equation?
ALCREW
states that every financial transaction has equal and opposite effects in at least two different accounts that are used to satisfy both the basic and expanded accounting equations
double entry-accounting system
receivable is always what?
an asset
payable is always what?
a liability
a visual representation of an account (i.e. cash, accounts payable, service revenue, etc.) used to think through the journal entries for recording transactions
t-account
debit is what side?
left side
credit is what side?
right side
the _____ of an account indicates which side of the account - debit or credit - will increase the amount
normal balance
debits must _____ credits
equal
liabilites and owners equity are examples of?
credits
assets are an example of?
debits
assets ____ with a debit
increase
liabilities and owners equity _____ with a credit
increase
a book containing all the transactions that have occurred within a company in chronological order. in accounting, it is also referred to as the book of original entry
general journal
maintains a record for each account in a business chart of accounts
general ledger
the act of transferring an entry from the general journal to the proper account in the general ledger
posting
