Topic 0: General definitions Flashcards
1
Q
Variable costing
A
2
Q
Absorption costing
A
3
Q
T-account
A
A visual representation of a ledger account shaped like the letter “T” that is used in accounting to track transactions.
The left side of the “T” is for debits.
The right side of the “T” is for credits.
4
Q
Credit
A
The right side of the T-account, where decreases in assets and increases in liabilities, equity, or revenue are recorded.
Negative side of balance.
5
Q
Debit
A
The left side of the T-account, where increases in assets and expenses, and decreases in liabilities, equity, or revenue are recorded.
Positive side of balance.
6
Q
What is a quick rule for credit and debit?
A
Assets & Expenses: Increase with debits and decrease with credits.
Liabilities, Equity, & Revenue: Increase with credits and decrease with debits.
