Module 2 Flashcards
When businesses are recording transactions in their financial records, they use smaller groupings called _______.
accounts
________ include accounts such as cash, accounts receivable, inventory, and fixed assets.
assets
We use an accounting method called double entry accounting, which uses debits on the ____ and credits on the ____.
left; right
Debits and credits do not necessarily mean good and bad, they simply represent _______ or _______,
depending on the account being debited or credited.
increases; decreases
Assets and expenses increase with a ______.
debit
Assets and expenses decrease with a ______.
credit
Liabilities, equity, and revenue ______ with a credit.
increase
Liabilities, equity, and revenue ______ with a debit.
decrease
The total of debits must always be _____ to the total of credits.
equal
All transactions are recorded in _________, with debits on the left and credits on the right.
journal entries
Journal entries can then be summarized in ______, again with debits on the left and credits on the right.
T-accounts
All the T-accounts of a business can be summarized in a __________.
trial balance
A trial balance is simply a list of all of the business’ accounts that have balances at that _____, and the ______ in each account.
date; amount
The ______ in each account is listed in the trial balance, shown in either the debit or credit column.
balance
Asset and expense accounts will typically have _____ balances,
debit
