MODULE 8 Flashcards
____ is the process of recording business transactions in a systematic and chronological manner
Bookkeeping
Bookkeeping is ___ because it follows procedures and principles. On the other hand, it is ___ because the transactions are recorded in order of the date of occurrence.
Systematic, Chronological
IT IS THE STARTING POINT OF THE ACCOUNTING PROCESS and is the foundation for gathering the information necessary to answer questions related to the profitability, solvency, and liquidity of the business
Bookkeeping
Each business has a ___ who is IN CHARGE TO RECORD, MAINTAIN, AND UPDATE BUSINESS RECORDS from all sorts of financial transactions using account title that can be found in the charts of accounts already set up by the Accountant.
Bookkeeper
The ___ DICTATES THE BOOKKEEPER to keep track of all financial transactions of the business.
Bookkeeping function
Only transactions that has ___ will be recorded.
Monetary value
The bookkeeper uses this to RECORD THE BUSINESS TRANSACTIONS WHICH IS TO BE CONSOLIDATED later to help construct financial statement such as the Trial Balance, Income Statement and Balance Sheet.
Book of Accounts
The book of accounts are composed of the ___
Journal and Ledger
It refers to the book of ORIGINAL ENTRY
Journal
It refers to the book of FINAL ENTRY
Ledger
It is the most BASIC JOURNAL which provides columns for date, account titles and explanations, folio or references and a separate column for debit and credit entries
General Journal
A general journal provides columns for:
- Date
- Account titles and explanations
- Folio or references
- Debit and Credit Card Entries
The ___ is a GROUPING OF ALL ACCOUNTS DIRECTLY TRACEABLE TO THE CHART OF ACCOUNTS. These accounts will be reflected in the financial statements as a summary of all financial activities that have taken place as recorded in the general journal and subsidiary ledgers
General Ledger
The ___ is a group of accounts DIRECTLY ASSOCIATED FROM THE GENERAL LEDGER. This record is created TO MAINTAIN INDIVIDUAL ACCOUNTS FOR CUSTOMERS AND VENDORS WHOSE CASH IS NOT BEING USED AS A MEDIUM OF EXCHANGE when purchasing or selling merchandise
Subsidiary ledger
What is included in a subsidiary ledger?
Accounts Receivable and Accounts Payable
In the process of journalization, following the rules of ___ are an essential part to ensure accurate recording and sound decision-making
Debit and Credit
Debit is abbreviated as __ while __ for Credit.
DR, CR
When cash or non-cash items are RECEIVED, the said cash or non-cash items must be recorded in the ___ column. This means that the debit balance increased. It is called ___.
Debit, Value Received
When cash or non-cash items are GIVEN, the said cash or non-cash items must be recorded in the ___ column. This means that the credit balance is increased. It is called ___
Credit, Value parted with
The following steps will be undertaken in determining account balances for every account title such as cash, account receivable, etc.:
- Add all the debit side to generate total debit
- Add all the credit side to generate total credit.
- Subtract total debit to the total credit.
- Determine the balance of each account.
It is a LIST OF ALL LEDGER ACCOUNTS WITH CLOSED OR FINAL BALANCES ON A CERTAIN PERIOD arranged according to the rules of debit and credit.
Trial balance
In the trial balance, the debit and credit columns must be ___ in total amount. This is the first report prior to financial statement preparation
Equal
What are the five major accounts?
- Assets
- Liabilities
- Owner’s Equity
- Revenue
- Expense Accounts
The trial balance report has two phases. What are they?
- Unjusted trial balance
- Adjusted trial balance
On the first phase of the trial balance, the first phase___ is a REPORT OF ALL BALANCES AFTTER POSTING OF THE GENERAL LEDGER ACCOUNTS.
Unadjusted trial balance