Study Guide 1 Flashcards
anything of value that is owned
asset
an amount owed by a business
liability
financial rights to the assets of a business
equities
the amount remaining after the value of all liabilities is subtracted from the value of all assets
owners’ equity
the owner’s equity in a corporation
stockholders’ equity
an equation showing the relationship among assets, liabilities, and owners’ equity
accounting equation
business papers from which information is obtained for a journal entry
source documents
the recording of debit and credit parts of a transaction
double-entry accounting
a form for recording transactions in chronological order
journal
a journal used to record only one kind of transaction
special journal
a record summarizing all the information pertaining to a single item in the accounting equation
account
a group of accounts
ledger
a ledger that contains all accounts needed to prepare financial statements
general ledger
a ledger that is summarized in a single general ledger account
subsidiary ledger
an account in a general ledger that summarizes all accounts in a subsidiary ledger
controlling account
the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current
file maintenance
an accounting system showing accounting information for two or more departments
departmental accounting system
a business that purchases and sells goods
merchandising business
transferring transaction information from a journal entry to a ledger account
posting
a form prepared by the consumer showing the price deduction for purchase returns and allowances
debit memorandum
an account that reduces a related account on a financial statement
contra account
a deduction that a vendor allows on the invoice amount to encourage prompt payment
cash discount
a cash discount on purchases taken by a customer
purchases discount
an amount of cash kept on hand and used for making small payments
petty cash
